The Shutdown & the IRS: What is Going On
When Congress fails to pass appropriation bills or a continuing resolution, non‑essential federal operations are forced to pause. The Internal Revenue Service (“IRS”) is no exception.
In the 2025 shutdown, the IRS had a built‑in cushion: through supplemental funds and was able to operate “normally” for the first five business days after funding lapsed; however, on October 8, 2025, that safety net expired, and the widespread furloughs began. Over 30,000 IRS employees were furloughed, leaving just over half the workforce active in excepted roles.
Key Impacts on Tax Administration
While there are some updates from Washington, D.C. that the government may soon reopen, below are some impacts that taxpayers, tax practitioners, and government watchers are seeing right now.
Delays in Processing & Refunds
Paper returns, correspondence, and manual reviews are especially vulnerable during the shutdown, as there may not be enough staff to open, sort, and examine such files. Accordingly, backlogs are likely. For returns requiring additional verification, audit, or manual intervention, delays could, and are likely to, stretch months.
Customer Service & Support Disruption
Most IRS phone lines are nonfunctional or severely understaffed, and many calls are being rejected or go unanswered. Walk‑in Taxpayer Assistance Centers are largely closed or operating on reduced schedules, including the Taxpayer Advocate Service.
Collections, Enforcement & Notices
Routine collections and enforcement actions requiring human review tend to be paused. It is worth noting that interest, penalties, and statutory deadlines continue to accrue despite the shutdown. In other words, the federal tax law itself is unaffected by the shutdown.
