Congratulations, it’s finally after tax accounting season. You’ve made it past October 15, the final extension deadline that marks the end of another grueling tax season. While it may finally be time to breathe, seasoned tax professionals know that some issues still linger well beyond this critical date. The reality of working in tax preparation is that the after tax accounting season period brings its own unique set of challenges that can catch even experienced practitioners off guard.
It is important for every taxpayer to understand the post-deadline challenges and the relief options available to them, as this knowledge can help avoid penalties and ensure compliance.
Unlike the predictable chaos of busy season, the post-October 15 period presents a different kind of stress. Late-filing clients suddenly realize penalties are real, Internal Revenue Service (IRS) notices start arriving in mailboxes, and complex situations like pass-through entity tax credits create confusion that extends far beyond filing deadlines. Understanding what can happen after the October 15 filing date is crucial for maintaining client relationships, managing liability, and preparing for the next wave of year-end activities.
The after tax accounting season period following October 15 represents a unique transition phase that many tax professionals underestimate. This isn’t simply a time to recover from the extension rush – it’s when the consequences of missed deadlines, including missing the original deadline of October 15 for those on extension, incomplete filings, and complex tax situations begin to materialize in ways that can significantly impact both practitioners and their clients.
Even if filing deadlines are extended or missed, taxpayers are still required to pay taxes owed by the original due date to avoid penalties and interest.
Missing the original deadline can lead to penalties and other complications, underscoring its importance.
The October 15 deadline creates a perfect storm of pressure for tax professionals, especially coming just after the September 15 deadline for corporation returns and with year-end planning activities looming. This compressed timeline means accountants are juggling multiple busy seasons simultaneously, with little recovery time between critical deadlines.
The stress intensifies because extension clients typically represent the most complex cases – those requiring additional research, missing documentation, or complicated multi-state scenarios. Unlike the April rush where firms can rely on established workflows for standard returns, the extension season demands more individualized attention for each federal income tax return, creating bottlenecks that ripple through the entire practice.
Several factors contribute to ongoing challenges after the extension deadline passes. Many clients assume that filing their tax return completes their tax obligations for the year, not realizing that amended returns, estimated tax payments for the following quarter, and various tax credit corrections may still be required. Additionally, the IRS processing timeline means that even returns filed by October 15 may not be fully processed until weeks or months later, creating ongoing client inquiries and administrative burdens.
The proximity to year-end also means that tax professionals must immediately pivot to helping businesses such as LLCs, C Corps, and S Corps with fourth-quarter estimated tax payments, retirement contributions, and other year-end planning activities, all while managing the aftermath of extension season.
The immediate post-deadline period requires swift, organized action to protect both client interests and professional liability. Rather than treating October 16 as a recovery day, successful practitioners use this time to proactively address the inevitable issues that arise after any major filing deadline. It is crucial to review each client’s remaining balance, discuss available payment options, and ensure clients understand the importance of addressing unpaid amounts promptly to avoid additional penalties and interest.
As your final returns are submitted, brace for the impact of incoming notices and audits. Establishing a systematic approach for handling notices, audit requests, and other IRS communications prevents small issues from becoming major problems. Response times to notices and audits may be affected by reduced IRS staff, especially during periods of government shutdown.
Create a centralized tracking system for all client correspondence, ensuring that notice dates, response deadlines, and required actions are immediately logged and calendared. This preparation becomes crucial when dealing with time-sensitive responses that could affect client penalties or legal standing.
Proactive client communication after filing prevents the flood of “what happens next” inquiries that typically follow major deadlines. Send confirmation emails detailing what was filed, any payments made, expected refund timelines, and upcoming obligations like estimated tax payments for the next quarter.
For clients who owe additional taxes beyond what was paid with their return, provide clear payment instructions and deadlines to avoid failure-to-pay penalties. Include information about electronic payment options, such as paying directly from a checking or savings account using IRS Direct Pay or Electronic Funds Withdrawal, and direct deposit setup for future efficiency.
Late clients who missed the October 15 deadline need immediate guidance on their options and obligations. Rather than waiting for these clients to contact you in panic, proactively reach out with a clear action plan that includes immediate filing requirements, penalty calculations, and payment arrangement options.
Provide a realistic timeline for completing their late returns while emphasizing the daily accrual of penalties and interest. This proactive approach demonstrates professionalism while protecting your firm from liability associated with delayed client response.
While the urge to immediately dive into year-end planning is strong, taking a brief pause to decompress and evaluate lessons learned from extension season pays dividends in the long run. Use this time to conduct a quick debrief process with your team about what worked well and what needs improvement before the next busy season.
This breathing space also allows for proper transition planning as your focus shifts from individual income tax returns to business tax returns, estimated payments, and year-end advisory services.
The after tax accounting season period brings several predictable challenges that can overwhelm unprepared practitioners. These include managing federal tax obligations and deadlines, which often arise after the extension deadline.
Affected taxpayers in federally declared disaster areas may be able to exclude certain expenses, such as personal, family, living, or funeral costs, from their gross income. Proper documentation is required for these disaster-related tax provisions.
Understanding these common issues allows for better preparation and more effective client service during this transitional period.
Immediate Penalty Triggers Starting October 16, 2025
The most immediate challenge facing tax professionals after October 15 is the sudden rush of late clients who finally realize that penalties are real and accumulating daily. Starting October 16, 2025, any unfiled federal income tax return triggers a failure-to-file penalty of 5% of the unpaid taxes for each month or part of a month the return is late, up to a maximum of 25%.
These clients often appear in a state of panic, having assumed they had more flexibility in their filing timeline. The reality that penalties accrue monthly, not annually, comes as a shock to many taxpayers who may have delayed filing for various reasons.
Solution for Dealing with Late Clients Post-October 15
By combining proactive client management, efficient processes, and clear communication, tax professionals can mitigate the risks associated with late filings and protect their practice from financial and reputational harm.
Pass-through entity tax credits create ongoing complications well past the October 15 deadline, particularly affecting clients who own interests in partnerships or S corporations. These credits often require coordination between entity-level filings and individual returns, creating timing mismatches that extend resolution well into the following year.
Many clients discover discrepancies between the credits claimed on their individual income tax returns and the amounts actually distributed by the pass-through entities. This confusion intensifies when state tax credit programs have different timing requirements than federal provisions, requiring multiple amendments and recalculations.
The solution requires establishing clear communication protocols with both clients and their business entities to ensure credit information is accurately shared and properly timed. Create checklists for pass-through entity clients that verify credit eligibility and distribution timing before finalizing returns.
When IRS Notices Begin Arriving
The weeks following October 15 typically bring an increase in IRS notices as the agency processes the final wave of returns and identifies discrepancies, missing forms, or calculation errors. These notices often demand immediate attention and can require significant time to resolve, even when the underlying issue stems from IRS processing errors rather than preparer mistakes.
IRS notices begin arriving for various reasons: mismatched information between tax returns and third-party reporting documents, missing forms or schedules, calculation errors identified during processing, or requests for additional documentation to support claimed deductions or credits.
When IRS notices arrive, tax professionals face a difficult decision about who bears the cost of resolution. The notice may result from preparer error, client-provided incorrect information, missing documentation, or simple IRS processing mistakes. Determining responsibility and appropriate cost allocation requires careful consideration of client relationships, professional liability, and business sustainability.
Eat the Cost to Keep Clients Happy
One approach tax professionals take when dealing with IRS notices is to absorb the costs themselves to maintain strong client relationships. This strategy demonstrates a commitment to excellent service and helps reduce immediate conflicts with clients. However, while it may keep clients happy in the short term, it can erode the firm’s profitability over time. Additionally, it sets a precedent that may encourage client carelessness regarding future notices.
Add Notice Handling Fees to Original Pricing
Another strategy is to incorporate notice handling fees into the original pricing structure. This ensures fair compensation for all the work involved in resolving IRS notices and protects the firm’s profitability. Transparent pricing models help clients understand potential additional costs upfront. On the downside, this approach may make the firm appear more expensive compared to competitors and requires educating clients about these potential fees.
Charge Percentage Based on Return Complexity if Notices Arise
A third option is to charge clients a percentage fee based on the complexity of their tax return when IRS notices arise. This method scales the cost with the level of effort required and shares the risk between the firm and the client. It also incentivizes accurate documentation from clients. However, this approach can be difficult to explain and may seem punitive to some clients. Additionally, calculating and implementing such fees can be complex for the firm.
The most effective approach often involves a hybrid strategy: absorbing costs for clear preparer errors while charging reasonable fees for notice resolution that stems from client-provided incorrect information or IRS processing issues.
In case the October 15 deadline isn’t enough, the federal government shutdown has led to an IRS-wide furlough, resulting in a severely reduced staff at the IRS. As of October 8th, the IRS announced that nearly half of their staff would be furloughed immediately due to this IRS-wide furlough. Only exempt employees—those considered essential—remain on duty during this period, which significantly impacts IRS operations. The main affected departments are reported to be customer service, IT services, and headquarters. Certain IRS operations are suspended until further notice due to the government shutdown.
What does the shutdown mean for post October 15th?
Expect notices and assessments to come in much later than usual. Additionally, if you or your clients have any questions or needed edits for the IRS, this will be much more difficult now. Communicate updates regularly with clients and let them know to expect much slower service and responses from the IRS until the shutdown ends.
For more information on how the shutdown will affect taxes, view our continuously updated FAQ blog.
The after tax accounting season period exposes communication gaps and process inefficiencies that can lead to errors, missed deadlines, and client dissatisfaction. Remitian addresses these challenges by creating systematic, automated processes that reduce the broken telephone game between tax professionals and their clients.
Traditional communication methods during tax season often resemble a broken telephone game, where critical information gets lost, distorted, or delayed between multiple parties. Clients provide incomplete information, deadlines get missed in email chains, and payment confirmations disappear into cluttered inboxes.
Remitian’s automated payment schedule system includes built-in error checks that catch discrepancies before they become IRS notices or penalty situations. The platform ensures that estimated tax payments, extension payments, and final balance payments are scheduled, confirmed, and tracked systematically.
The platform’s error-checking capabilities identify potential issues before returns are filed, reducing the likelihood of IRS notices and correspondence that typically arrive weeks after the filing deadline. Automated verification of payment amounts, dates, and recipient accounts prevents the simple errors that often trigger costly notice resolution processes.
By centralizing payment tracking and communication, Remitian creates a clear audit trail that protects both practitioners and clients when questions arise about filing compliance or payment timing. This systematic approach significantly reduces the administrative burden during the hectic after tax accounting season period.
Want to learn more? Book a demo with our team.
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Navigating the after tax accounting season requires vigilance, timely action, and clear communication to manage the challenges that arise beyond the October 15 deadline. While the extension provides additional time to file federal income tax returns, missing this deadline triggers significant penalties and interest that can quickly accumulate. The ongoing IRS operational constraints, including IRS-wide furloughs and reduced staffing during government shutdowns, add complexity to processing and responding to tax filings and notices, making electronic filing and direct deposit even more crucial to avoid delays. Mailing a paper return can result in significant processing delays and increased risk of lost documents, making electronic filing the preferred method. Using e-file and e filing is the fastest and most reliable way to submit federal tax returns and receive refunds promptly.
Taxpayers, especially affected taxpayers in a federally declared disaster area like Los Angeles County, should be aware of available tax relief options and extended deadlines. Taxpayers in a federally declared disaster area may be eligible for extended deadlines and can choose to claim certain casualty losses on either the current or prior year tax return. Whether you owe taxes or expect a tax refund, understanding your obligations and payment plans can help minimize financial impact and stress during this period. Tax professionals play a vital role in guiding clients through these post-deadline challenges, helping them file returns promptly, manage remaining balances, and prepare for upcoming tax obligations.
By staying proactive and informed, both taxpayers and tax professionals can successfully navigate the complexities of the after tax accounting season, ensuring compliance with IRS requirements and positioning themselves for a smoother tax season next year.
You should file immediately to stop the 5% monthly failure-to-file penalty from continuing to accrue. The IRS will assess penalties starting October 16, 2025, but filing promptly can prevent additional months of penalties. Interest will continue to accrue on any unpaid taxes from April 15, 2025, until full payment is made.
Yes, you can still claim your refund, but you have only three years from the original April 15, 2025 due date to file and claim it. If you’re owed a refund, there’s no penalty for filing late, but you’ll want to file soon to receive your money. After the three-year deadline (April 15, 2028), unclaimed refunds become property of the U.S. Treasury.
Despite IRS furloughs affecting approximately 34,400 employees, tax deadlines remain firm and penalties continue to accrue. Essential IRS operations continue, but customer service is limited and processing times are longer. You should still file electronically when possible and avoid relying on phone support during shutdown periods.
Yes, the IRS may grant penalty relief for reasonable cause situations such as natural disasters, serious illness, or unavoidable absence. First-time penalty abatement is available if you have a clean compliance history for the three years prior to the tax year in question. You’ll need to request this relief separately and provide documentation supporting your circumstances.
The failure-to-file penalty is much steeper at 5% per month (up to 25% maximum) compared to the failure-to-pay penalty of 0.5% per month. If you can’t pay your taxes, you should still file on time to avoid the higher filing penalty. The maximum combined penalty is 5% per month when both apply simultaneously.
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