The current government shutdown is causing major disruptions for the IRS with nearly half its workforce furloughed and most core operations suspended.
The IRS announced today that “due to the lapse in appropriations, most IRS operations are closed.”
Taxpayers can expect significant delays in receiving IRS assistance and processing for paper filed tax returns due on Oct. 15 for those who filed extensions. Returns filed electronically that are processed through the IRS automated systems should not see any delays for now.
Additionally, all services supporting taxpayers, including in-person and telephonic phone contact, audit correspondence, staff associated with enforced collections, and the Taxpayer Advocate Service, will all see significant impacts on their core functionalities during the current government shutdown.
IRS Operations During the Shutdown
- Starting Oct. 8, the IRS moved to an updated shutdown contingency plan, placing about 34,000 employees (46%) on furlough, while retaining 39,870 as “exempt” employees, using leftover funds from the Inflation Reduction Act.
- Most in-person services and taxpayer call centers have closed or will have extended wait times. Paper returns, mailed payments and correspondence are not being processed, leading to delayed responses for anything requiring direct staff involvement.
- Only critical public-facing services (e-filing systems, payment processing, and issuing automated tax refunds) remain active.
- This disruption includes staffing at the Tax Division of the Department of Justice.
Impact on Taxpayers
- E-filed tax returns are still being processed, and the Oct. 15 extension deadline for 2024 filings remains unchanged. Automated refund issuance continues, although direct deposit is recommended to avoid delays.
- Enforcement actions, audits and live phone support are mostly paused. The Taxpayer Advocate Service is also affected, reducing support for those facing IRS hardships, though some limited activities continue to protect government property and revenue systems.
- Interest and penalties on unpaid taxes will continue to accrue even during the shutdown.
What Taxpayers Should do
The IRS expects most delays and service interruptions to resolve once funding is restored. Taxpayers relying on live support, paper filings or complex IRS interactions should plan for longer wait times and limited assistance while the shutdown continues.
PartnerJoseph A. Peterson leads Plunkett Cooney’s Tax Law Practice Group and is a partner in the firm’s Business Transactions & Planning Practice Group, where he counsels businesses, individuals and nonprofit organizations on a ...
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