The IRS has announced expanded tax relief under Internal Revenue Code §7508A for individuals and businesses affected by the conflict in Israel. Under Notice 2025-53, eligible taxpayers now have until Sept. 30, 2026, to file returns, make payments and complete other time-sensitive tax obligations that would otherwise be due earlier.

This new relief builds on prior guidance in Notice 2023-71 and Notice 2024-72, which extended deadlines following the terroristic actions on Oct. 7, 2023. Together, these notices now postpone a wide range of deadlines that fall between Oct. 7, 2023, and Sept. 30, 2026.

Why this relief matters

§7508A gives the treasury secretary authority to postpone deadlines when taxpayers are affected by terrorist or military actions. Before issuing Notice 2025-53, the secretary consulted the Departments of State and Justice and determined that the attacks against Israel in 2024 and 2025 qualify. That finding formally triggered the IRS’ ability to extend deadlines.

For taxpayers, this relief provides room for breathing. It recognizes that some people may not have access to records, advisors or the ability to manage filings in the middle of ongoing disruption.

Who qualifies

The IRS defines “affected taxpayers” broadly. Those automatically covered include:

• Individuals whose primary residence is in Israel, the West Bank or Gaza
• Businesses or sole proprietors whose principal place of business is in the covered area
• Relief workers affiliated with recognized organizations working in the region
• Taxpayers whose records or preparers are in the covered area
• Individuals visiting the area who were injured, taken hostage or killed
• Spouses of affected taxpayers filing jointly

The IRS will automatically apply relief based on past filings. Taxpayers who qualify but live outside the area can request relief by calling the IRS disaster hotline at 866-562-5227 or 267-941-1000 for international callers.

What deadlines are postponed

Notice 2025-53 pushes many taxpayer acts to Sept. 30, 2026, if they were otherwise due on or after Sept. 30, 2025. These include:

• Filing income, estate, gift, excise and employment tax returns
• Making federal tax payments or installments
• Contributing to qualified retirement plans
• Filing petitions with the U.S. Tax Court
• Filing claims for credits or refunds
• Initiating lawsuits for refunds or credits

Certain IRS actions are also postponed. These include assessments, notices, collections and lawsuits initiated by the government. The final deadline of Sept. 30, 2026 is firm only for acts due during the postponement period specified in Notice 2025-53. Acts due outside that period are not affected.

The new notice interacts with prior relief. For taxpayers already covered under Notices 2023-71 or 2024-72, the deadlines are now extended to Sept. 30, 2026, as long as they meet the criteria of Notice 2025-53. If a taxpayer qualified only under the earlier notices but not the new one, the earlier deadlines still apply.

What tax pros should do

As a tax professional, your role is to make sure clients can take advantage of this relief. Key steps include:

1. Review eligibility. Identify clients with ties to the affected region or whose records are located there.
2. Update calendars. Adjust internal systems and filing schedules to reflect the extended deadlines.
3. Communicate clearly. Many clients may not know relief applies to them. Explain how deadlines shift and what that means.
4. Assist with hotline requests. For clients outside the automatic coverage zone, help them request relief by contacting the IRS hotline.
5. Manage overlaps. Be mindful of how this notice interacts with earlier ones to avoid confusion.

Challenges to consider

Relief under §7508A does not cover every tax act, so you must confirm eligibility on a case-by-case basis. The final deadline of Sept. 30, 2026, is firm, and missed filings could still result in penalties. Communication is crucial, especially for taxpayers who do not live in the covered area but may still qualify. Firms may also face heavier workloads as postponed filings converge in late 2026.

Final thoughts

For practitioners, the key is staying proactive. Identify who qualifies, communicate clearly with clients and prepare your systems for the new timeline. This relief not only provides time but also offers an opportunity for you to guide clients through complex rules with clarity and confidence.

Question: Jennifer’s 80-year-old father, Robert Jorgensen, lives alone in his home. He qualifies as Jennifer’s medical dependent since he would be her tax dependent (qualifying relative) except for the gross income test ($5,200 for 2025). To help Robert age in place, Jennifer paid for the installation of a stair lift ($3,000) and a zero-threshold shower ($9,500). Medically necessary improvements to a home qualify as itemized medical deductions, provided they don’t increase the home’s fair market value (FMV). If they do, then the expense is reduced by the increase to FMV. While the stair lift does not usually increase basis, the zero-threshold shower adds $2,000 to the value of Robert’s home. What is Jennifer’s allowable deduction for Robert’s improvements on her Schedule A, Itemized Deductions (1040)?

Answer: Jennifer’s deduction on Schedule A is limited to the cost of the stair lift, $3,000, plus only part of the cost of the zero-threshold shower that did not increase the FMV of the home. The deductible amount of a medical improvement on Schedule A is the cost minus any increase in the property’s FMV due to the improvement [Reg § 1.213-1(e)(1)(iii)]. In this case, Jennifer will deduct only $7,500, or ($9,500 - $2,000). Her total deduction will be ($3,000 + $7,500) for a total Schedule A deduction of $10,500.

Additionally, $2,000 of the $9,500 zero-threshold shower will be added to the cost basis of Robert’s home, rather than being deducted on Jennifer’s Schedule A.

As of Oct. 8, 2025, the IRS has activated its fiscal year 2026 Lapsed Appropriations Contingency Plan, since Congress has not yet passed annual funding legislation. The updated plan covers an extended lapse scenario through April 2026, should the funding gap persists until then. Past shutdowns (such as the 2018-2019 lapse) caused major disruptions, including refund delays, suspended audits and a backlog that took months to clear. The new plan seeks to minimize any similar impacts by prioritizing life, property and data protection during this funding lapse. Here’s a breakdown of the plan.

Workforce management and exempt vs furloughed employees

Out of ~74,299 employees (as of July 2025), 39,870 (53.6 %) will continue working. The remainder of the employees will be furloughed until funding is provided to resume normal operations. To be considered necessary (deemed “exempt” or “excepted”), employees must:

• Already be funded by multi-year or no-year appropriations (i.e., not dependent on annual appropriations) 
• Maintain activities “authorized by law,” even in a lapse context 
• Provide functions necessary to safeguard life or property (with a strict standard) 
• Complete tasks necessary to effect an orderly shutdown and to protect government property or data

Activities that continue under the plan

The plan distinguishes services under specific categories (A, B, C) for exempt or exception-based continuation:

Category A1 (funded by nonexpiring funds/legally allowed)

• Certain taxpayer verification services (e.g., the Income Verification Express Service (IVES)) 
• Issuance of Form 6166, Certification of U.S. tax residency
• Some contract work, modernization efforts and tasks tied to legislated mandates (e.g., P.L. 119-21 / OBBBA) 
• Essential services connected to other agencies (Social Security, OPM) Category B (“safety of life/protection of government property”)
• Processing remittances and tax return payments, to protect those funds as government property
• Computer operations to prevent data loss, protecting infrastructure 
• Mail processing for remittances, disaster relief transcripts, etc.
• Protection of statutes of limitations, liens, seizures (i.e., preserving legal rights)

Category C (shutdown transition/“close down” operations)

• Finalizing and storing records, inventories, securing work in progress 
• Processing notices of furlough, performing shutdown-specific administrative tasks

Activities that cease

Many IRS functions outside the core “excepted” operations are suspended, including:

• Routine taxpayer assistance (e.g., answering general taxpayer inquiries, call centers) outside of filing season or emergencies
• Collections that are non-automated (manual enforcement)
• Legal counsel for non-excepted functions
• Research, training, long-term planning, IT enhancements outside of core mission or necessary to protect property/data
• Certain procurement, contract initiation and administrative overhead not tightly tied to exempt functions

How this plan affects taxpayers and tax professionals

Impact area	Effects and disruptions	Duration and severity notes
Customer support	Most non-emergency services are suspended; taxpayers are unable to get direct answers	During the entire lapse period (unless a function is “excepted”)
Processing non-remittance tax returns	Returns without payments aren’t processed; refund issuance is delayed	Until funding returns
Tax payments and remittances	The IRS will continue processing payments	This is one of the higher-priority excepted functions
Collections/ enforcement and audits	Non-automated collections and many audit activities are suspended	Could backlog significantly
Legal motions, litigation, appeals	Only those with imminent deadlines (“excepted” positions) will proceed; routine legal activity stalls	Time-sensitive matters are prioritized; others delayed
IT systems, modernization, digital services	Only minimal system maintenance to prevent data loss will continue; no new enhancements or non-essential updates	Innovation and upgrades paused
Tax professional support/publications/rulings/guidance	Less new guidance, fewer rulings, slow responses	Longer wait for responses and interpretation support
Filing season preparation and forms	Some tasks (designing, printing forms, testing) will continue if necessary to protect the upcoming filing season, but many supporting operations will slow	Risk to timely readiness for next filing season
Disaster tax relief/emergency assistance	Some disaster-relief tax services are designated to continue under “excepted” status, with limitations	For areas under disaster declarations, some continuity may remain
Statute and legal protection	The IRS will continue operations that preserve taxpayer or government rights (statutes of limitations, liens, etc.)	Prevents “clock running out” on enforcement rights

Key takeaways for October deadlines

Deadlines still apply during the shutdown, and statutory due dates remain unchanged. (See §6151, §6072, CFR 1.6072-1) This means the Oct. 15 filing deadline for individuals on extension remains in full effect even if IRS operations slow. The same is true for payment due dates. Interest and penalties will still accrue if a balance is due with the return. There is no automatic grace period or postponement unless Congress should enact any legislation or the IRS formally announces any relief (to date, neither has happened nor is pending).

Let clients know they should file and pay as usual. Clients should submit payments online and avoid mailing checks that could get stuck in a backlog. Remind clients to document everything and to keep proof of timely e-filing and payment.

After the government shutdown ends

Once appropriations are restored, all furloughed employees will be recalled to work. Under the plan, the IRS will notify employees via hotline, internal websites, call trees, etc. Employees are expected to report within four hours on a scheduled workday, or on the next scheduled workday if recall happens off schedule. During reactivation, management may permit telework or liberal leave as needed to facilitate a smooth transition.