Government Shutdown Obstructed October Inflation Data
The IRS confirmed it will use an 11-month average to set 2027 tax figures after the shutdown blocked key data.
Updated on Sept. 24, 2026 in Taxes
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A government shutdown in October 2025 halted the collection of essential inflation data by the Bureau of Labor Statistics. The IRS announced it will use a modified 11-month window to calculate necessary annual tax adjustments for 2027.
Why it matters
The IRS adjusts tax parameters annually to ensure they keep pace with inflation using a specific 12-month window. Because the missing October data cannot be recovered, the agency must alter its calculation methodology to ensure tax filings remain compliant with statutory requirements.
The IRS projects the maximum 2027 Child Tax Credit at $2,300, while the income threshold for the 12% tax bracket for joint filers is estimated at $25,600. These figures follow the increase of the estate and gift tax exemption to $15 million.
The players
IRS
The Internal Revenue Service is the federal agency responsible for tax administration and the collection of federal taxes in the United States.
Bureau of Labor Statistics
The Bureau of Labor Statistics is the principal federal agency responsible for measuring labor market activity, working conditions, and price changes.
The details
The IRS typically uses the average C-CPI-U for the 12-month period ending August 31 to determine annual tax indexing. The Bureau of Labor Statistics stated that because the October 2025 shutdown prevented data collection, the missing figures cannot be reconstructed.
Timeline
October 2025 was the period when the government shutdown prevented data collection.
August 31 marks the end of the standard 12-month period used for tax adjustment calculations.
2027 is the tax year for which the modified inflation adjustments are currently being set.
Macro View
This procedural shift diverges from standard economic cycles where data collection remains consistent over time. It highlights how administrative stability is required for predictable tax indexing as established by the Internal Revenue Code annual inflation adjustment provisions.
The change in methodology may result in slight variances in tax bracket thresholds or credit amounts compared to traditional calculations. Taxpayers should monitor official IRS releases to understand how these adjusted benchmarks affect their 2027 income tax obligations.
The takeaway
Taxpayers should prepare for potential adjustments in standard tax parameters due to the unusual shift in the underlying inflation index. Consulting with a tax professional can help families navigate how these modified figures impact long-term financial planning.
Further reading
For more information on current federal tax requirements, visit the Taxes section.
Source note: This article includes information reported by Thomson Reuters.
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