Another week, another sad reminder that the ERC processing pipeline is running on fumes. While the headline numbers show a jump in average refund size and dollar volume, we continue to remain stale in “moratorium-esque” times. For small businesses that have been waiting 18+ months, the picture remains bleak: record-low refund counts, audit activity spiking, and confidence in the IRS continuing to deteriorate.
With a government shutdown currently underway, it remains to be seen how and when the IRS will be impacted. Check out our updates in “Fresh Off the Press” for all the need-to-know details on the situation.
📉 Total refunds slipped to just 64 refunds, down from last week’s 79. That’s still barely a ripple compared to the spring highs earlier this year.
📈 Average refund amount spiked to $435,644, a sharp rise from $118,117 last week, driven by a small number of seven-figure checks.
📈 Total dollar volume jumped to $27.9M, up from $9.37M. Again, strong at face value but driven by size, not scale.
📉 Average days from filing to refund now sits at 548 days, a modest improvement from 588 last week, but still nearly 18 months of waiting.
1. Government “Stalemate” Will Last a Minimum of Three Days - As Congress stalls on passing its new spending bills, a partial government shutdown looms and many federal operations may be constrained or suspended until the impasse is resolved. Some essential services will continue under existing appropriations, but noncritical agencies and programs risk furloughs or halted operations. The uncertainty has already begun to ripple through government planning, with agencies scrambling to gauge how long they can sustain core functions without fresh funding. Meanwhile, discussions around continuing resolutions and emergency spending bills are intensifying, raising questions about how long the stalemate might persist and how deeply it could affect civilian, regulatory, and administrative operations.
2. The IRS Has Only Five Days of Full Runway Amid Government Shutdown - The IRS has indicated that it will remain open for the first several days of any government shutdown, using reserve funds to temporarily sustain operations. While this offers a short buffer and some reassurance to taxpayers, it’s hardly a solution. If the shutdown extends beyond that initial window, the agency’s ability to process refunds, respond to taxpayers, and manage ongoing programs could quickly stall. For ERC claimants already facing record delays, the prospect of another disruption underscores just how fragile the refund pipeline remains; continuity may be measured in days, not weeks.
Kenny's Conclusions
In short, the ERC machine (or lack thereof) remains stuck in neutral: refunds are trickling, audits are accelerating, and the shadow of a government shutdown threatens to deepen the uncertainty. While occasional large checks create the illusion of progress, the broader pipeline is as clogged as it’s ever been. Until the leaderless IRS provides a clear path forward, both in processing and policy, the waiting game continues for thousands of businesses caught in the crossfire of enforcement and delay.
Signing off!
Kenny Dettman, CPA
Disclaimer: *𝘋𝘢𝘵𝘢 𝘴𝘦𝘵 𝘪𝘴 𝘧𝘳𝘰𝘮 𝘢𝘱𝘱𝘳𝘰𝘹𝘪𝘮𝘢𝘵𝘦𝘭𝘺 14,000 𝘣𝘶𝘴𝘪𝘯𝘦𝘴𝘴𝘦𝘴 𝘵𝘳𝘢𝘤𝘬𝘪𝘯𝘨 𝘌𝘙𝘊*
