Last week, we noted the long-awaited release of the 2025-2026 Internal Revenue Service (IRS) Priority Guidance Plan (PGP) just before the government shutdown went into effect on October 1, 2025. Relying on Inflation Reduction Act funding, the IRS was able to avoid the impact of the shutdown for five days, but that reprieve ended on October 8, 2025.

The new PGP significantly reduced the number of projects on the plan with those projects being "the focus of [the government's] efforts during the plan year," which ends on June 30, 2026. With the IRS already facing significant senior leadership, personnel, and funding issues, the government shutdown only exacerbates the challenges ahead for the agency.

At the highest levels, the IRS is led by two Department of the Treasury officials in an "acting" capacity – Secretary Scott Bessent as Acting Commissioner and Assistant Secretary for Tax Policy Ken Kies as Acting Chief Counsel. But reinforcements are on the way, with the announcement that Commissioner of the Social Security Administration Frank Bisignano will serve in the newly created role of IRS Chief Executive Officer and the Senate Committee on Finance favorably reporting the nomination of Don Korb as Chief Counsel. Yet even with these two senior-level officials soon in place, the loss of other senior executives at the IRS and Office of Chief Counsel, combined with the recently announced furloughs, could slow the gears a bit. It is expected, however, that the administration will continue to prioritize – even through the shutdown – promulgation of guidance to implement the One Big Beautiful Bill Act (OBBBA).

In reviewing the projects on the PGP, it is important to note that several are well under way, including the proposed qualified tip deduction guidance, guidance regarding section 174 research and development (R&D) amortization, "beginning of construction guidance" with respect to wind and solar credits, and several corporate alternative minimum tax (CAMT) notices. Whether the IRS can continue the pace of released guidance and meet its goal of accomplishing a significant number of PGP projects by the end of the plan year remains to be seen – but the longer the shutdown continues, the harder it will be, particularly for projects outside the scope of OBBBA implementation. And don't forget that the Trump administration reinstated the authority of the Office of Management and Budget (OMB) to review and revise tax regulations ahead of formal promulgation, which adds another speed bump in the drive to implement the OBBBA. #TaxTake

Upcoming Speaking Engagements and Events

Mike will speak at Practising Law Institute's Tax Strategies for Corporate Acquisitions, Dispositions, Spin-Offs, Joint Ventures, Financings, Reorganizations & Restructurings 2025 conference on October 22, and on October 27, he will preside over the afternoon sessions at the 60th Annual Southern Federal Tax Institute, of which fellow Tax Member George Hani is Program Chair.  

In the News

Marc commented on the impact of the government shutdown on IRS operations and the rollout of the GOP's July tax law in Bloomberg Law. "Even with the best efforts and designating people 'essential,' there is going to be a natural slowdown on how quickly they can get guidance out."

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