When Congress fails to pass appropriations or a continuing resolution to fund federal agencies beyond September 30, non-essential (“discretionary”) operations must pause. Essential services—such as national security, certain health programs, and safety oversight—continue under statutory authority.
However, many agencies face “lapses in appropriations,” meaning staff are furloughed (temporarily without pay), and various functions slow or come to a halt.
So what about the IRS?
The IRS During a Shutdown: What We Know (and Don’t Know)
The Contingency Plan: 5 Days of Normal Ops (for Now)
To guard against disruption, the Treasury Department released a “lapse in appropriations contingency plan” for the IRS. Under that plan:
- The IRS intends to tap into funds allocated initially under the Inflation Reduction Act (IRA) of 2022 to sustain operations for about five business days without a fresh appropriation.
- During that time, the IRS expects that normal operations will continue: processing returns, payments, and basic services.
- More than 74,000 IRS employees would remain on the job (though they wouldn’t receive pay until the shutdown ends).
However, the contingency plan does not clearly state what happens after the five business days if the shutdown is extended.
Possible Impacts Beyond the First Few Days
If funding remains stalled, the IRS could scale back or suspend portions of its operations. Based on historical precedent and the scope of the contingency plan, these are likely areas of impact:
| Function | Likely to Be Affected—Eventually | Why / How |
| Customer service / phone lines | Yes, delays or closures | Many IRS support staff would be furloughed |
| Processing of paper returns or mailed correspondence | Yes, slower or paused | Paper channels need more manual effort |
| Refunds and credits | Possible delays | Even with operations running, staffing reductions can slow processing |
| Audits, examinations, appeals | Probably suspended or delayed | These are more discretionary and resource-intensive |
| Issuing rulings, guidance, determinations | Delayed or on hold | IRS’s procedural functions may be sidelined |
| Enforcement actions (liens, levies) | Reduced or paused | Such functions may lack staff or legal cover during lapse |
What Won’t Likely Change
- Filing deadlines and tax law: The shutdown does not typically change due dates or extend them. Tax obligations remain on schedule.
- Mandatory programs: Things like Social Security, Medicare, and Medicaid are funded by mandatory spending, so they generally continue during a shutdown.
- IRS digital systems (initially): Online platforms like e-file, direct pay, and “Where’s My Refund?” may remain functional as long as core operations are maintained.
What This Means for Taxpayers (and What You Can Do)
Given the uncertainty and likely disruptions, taxpayers should take proactive steps. Here’s what you should keep in mind:
1. File Early & Electronically
Submitting your return as soon as you’re ready—and via e-file/direct deposit—reduces your exposure to delays in processing.
2. Don’t Expect Automatic Refund Delays
Delays may happen, especially for paper returns, but they aren’t guaranteed. Budget your expectations accordingly.
3. Be Patient with IRS Support
Don’t be surprised if phone lines, correspondence replies, or IRS notices move slowly—or even temporarily stop. Keep records, follow up persistently, and consider alternate channels.
4. Stay on Top of Audits and Notices
If you received a letter from the IRS before or during the shutdown, don’t assume it’s moot. Continue to monitor deadlines and respond when possible. If the statute of limitations is near, the IRS may still act in certain cases.
5. Document Everything and Keep Records
Maintain copies of filings, proofs of mailing or electronic submission, and any correspondence with the IRS. These may become crucial if issues arise.
6. Don’t Let the Shutdown Be an Excuse to Delay Your Taxes
Even if the IRS slows, your legal obligation to file and pay on time remains. Penalties may still apply.
7. Watch for IRS Updates and Alerts
If the shutdown lasts beyond the contingency plan window, the IRS will likely issue updates, revised schedules, or new instructions. Stay tuned to IRS.gov and Treasury releases.
8. Seek Professional Help If You Need It
Tax professionals—such as CPAs, tax attorneys, and enrolled agents—may help interpret notices or navigate delays. They often have up-to-date insights and workarounds.
Final Thoughts
The government shutdown presents uncertainty, especially for complex tax matters or those already in progress with the IRS. For now, core operations may hold steady, but over time, delays and limitations are likely.
If you’re facing an urgent tax issue, receiving IRS correspondence, or worried your refund or audit might be delayed, reach out—either to your tax adviser or directly to the IRS—and don’t hesitate to ask for help. The best defense is staying informed, meeting deadlines, and being prepared.
