IRS Pauses Most Operations Amid Ongoing Government Shutdown

The Internal Revenue Service has announced that most of its operations are now closed as the federal government shutdown continues past the agency’s initial contingency plan period.

In a notice posted Wednesday, the IRS stated that it began furloughing a significant portion of its workforce on October 8, 2025. Only employees identified as “excepted” or “exempt” will continue working.

The agency had been able to operate for the first few days of the shutdown using leftover funds from the Inflation Reduction Act, but those reserves have now run out.

“Due to the lapse in appropriations, most IRS operations are closed,” the notice explained. “Employees who are not exempt or excepted are furloughed and placed in a non-pay and non-duty status until further notice.”

Furlough notices began going out Wednesday morning, with an estimated 34,000 of the IRS’s 74,000 employees expected to be affected. Staff were instructed to report for up to four hours to finalize work tasks and receive formal notification.

What Will Continue Operating

Certain core functions will continue during the shutdown, particularly those related to the upcoming filing season. These include:

• Completing and testing filing year programs

• Updating tax forms for the new year

• Revenue collection and limited computer operations to protect data

• Processing disaster relief transcripts

• Maintaining criminal investigations and undercover operations

  
  

What Will Be Suspended

Many other services will pause until government funding is restored, including:

• Non-automated collections and audits

• Processing non-disaster relief transcripts

• Responding to taxpayer inquiries

• Operations of the Taxpayer Advocate Service

  
  

Impact on Taxpayers

Doreen Greenwald, president of the National Treasury Employees Union, said the shutdown will create widespread delays and frustration for both taxpayers and IRS employees.

“The American people lost access to many vital IRS services when thousands of employees were furloughed,” Greenwald said. “Expect increased wait times, growing backlogs, and delays in implementing tax law changes as the shutdown continues.”

She added that the lack of communication left many employees uncertain about their work status until receiving notice from their supervisors.

“Every day these employees are locked out of work adds to the backlog and taxpayer frustration,” she said. “We urge the administration and Congress to reach an agreement that reopens the government and restores critical public services.”

What This Means for Taxpayers

During the shutdown, the IRS will not process many types of correspondence or respond to most taxpayer inquiries. Refunds and ongoing audits may also be delayed. If you’re waiting on communication or documentation from the IRS, expect longer timelines than usual.

At Kamish & Associates, our team is continuing to monitor updates from the IRS and will keep clients informed of any changes that may impact tax filings, payments, or compliance deadlines. If you have questions about how the shutdown might affect your situation, please contact our office - we’re here to help you navigate this period with as little disruption as possible.