IRS Closes Doors to Most Employees as Federal Shutdown Drags On
The Internal Revenue Service has begun wide-scale furloughs and suspended most of its functions as the federal government shutdown continues past its initial planning period.
According to a notice posted on the IRS website Wednesday morning, “most IRS operations are closed” due to a lapse in appropriations. While the agency initially continued full staffing for the first five business days of the shutdown, updated guidance now confirms a significant workforce reduction.
Furloughs Begin Nationwide
As of October 8, the IRS has implemented an agency-wide furlough affecting the majority of its staff, with only pre-designated excepted and exempt employees allowed to continue working. A formal notice sent to all staff instructed non-excepted employees to expect unpaid, non-duty status until further notice.
Employees were given up to four hours to complete administrative tasks — such as setting out-of-office replies — and prepare for the furlough. The agency has not released an updated contingency plan detailing which positions are considered essential.
Back Pay Remains in Question Despite 2019 Law
The furlough notice references the Government Employee Fair Treatment Act of 2019, which mandates that all furloughed and excepted federal employees receive back pay once funding is restored. This law was enacted following the 35-day shutdown in 2018–2019.
However, a draft memo circulated by the Office of Management and Budget (OMB) on Tuesday suggested this protection may no longer be automatic. The memo reportedly stated that Congress must explicitly authorize back pay in any future stopgap funding bill.
This position drew swift bipartisan criticism. House Speaker Mike Johnson (R-La.) said he believes federal employees remain entitled to compensation:
“It’s my understanding that the law is that they would be paid… and that’s my position. They should not be subjected to harm and financial dire straits.”
Legal experts also questioned the OMB’s interpretation and suggested it may face legal challenges.
Uncertainty for IRS Employees Nationwide
Reports from field offices indicated that some IRS staff received notice of their furlough status late Tuesday. In some cases, managers contacted employees outside of regular working hours to communicate the change in plans.
According to a letter from Acting Chief Human Capital Officer David Traynor, only employees with confirmed excepted or exempt status are permitted to continue work. All others are considered furloughed as of October 8.
Inflation Reduction Act Funding Falls Short in Prolonged Shutdown
Initially, the IRS had planned to use Inflation Reduction Act funds to continue operations during the funding lapse. Those funds were intended to support workforce rebuilding and technology upgrades after years of budget reductions.
However, the agency concluded there were limits to how those funds could legally be used during a shutdown. As a result, the IRS reversed its original plan to remain “fully operational” and opted to furlough a significant portion of its staff.
Upcoming Tax Season Faces Disruption
The shutdown comes as the IRS prepares for the next filing season and begins implementation of major tax code changes under legislation signed by President Trump in July. While some programs funded through the Inflation Reduction Act may continue, other core functions are paused.
The agency has yet to clarify how the shutdown will affect tax processing and customer service operations ahead of the 2026 filing season.
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