Is the IRS Affected by Government Shutdown?
Understand the operational changes at the IRS during a government shutdown. Learn which core functions continue, which are paused, and what this means for taxpayers.
A government shutdown results from a failure by Congress to pass funding legislation, leading to the temporary suspension of many federal services. The Internal Revenue Service (IRS) is directly impacted by these funding gaps, and many of its operations are scaled back. The specific impacts depend on the agency’s contingency plan, which distinguishes between essential and non-essential operations. While a shutdown alters the agency’s ability to perform its duties, it does not change the legal obligations of taxpayers.
Impact on Filing, Payments, and Refunds
Despite a federal government shutdown, the legal deadlines for filing tax returns and paying taxes owed remain in effect. Taxpayers are required to submit their returns by the established due date, which is April 15 or the next business day if it falls on a weekend or holiday. To avoid penalties, individuals must meet this deadline or file for an extension, which grants an additional six months to file but not to pay.
The infrastructure for submitting tax documents and payments continues to function. Electronic filing platforms, including IRS Free File and commercial tax preparation software, remain operational and will accept returns. Similarly, electronic payment systems like IRS Direct Pay and the Electronic Federal Tax Payment System (EFTPS) are available for taxpayers to remit any balance due.
While the issuance of tax refunds can be delayed, the IRS has, in some instances, continued to pay them. During the 2018–2019 shutdown, for example, the White House authorized the agency to issue refunds. The processing of electronically filed returns is largely automated, which helps facilitate their payment. Taxpayers who file paper returns are more likely to experience delays, as these documents may be stored without being processed until the agency returns to normal operations.
Changes to IRS Staffing and Functions
During a government shutdown, the IRS divides its workforce into furloughed and excepted employees. A large portion of the staff is furloughed, meaning they are sent home without pay and are prohibited from working. The remaining employees are designated as “excepted” because their roles are necessary to perform legally authorized activities or to protect government assets.
Excepted functions include processing tax returns that contain payments, maintaining IT security, and performing duties funded by sources outside of annual appropriations. This division means automated systems continue to run, but personnel for manual reviews, correspondence, and taxpayer assistance are largely unavailable. The number of excepted employees is a fraction of the total workforce, limiting the agency’s capacity.
Availability of Taxpayer Support
Direct assistance from the IRS becomes limited during a government shutdown. Live telephone support is unavailable, as the employees who staff these help lines are furloughed. The Taxpayer Advocate Service (TAS), an independent organization within the IRS that helps taxpayers resolve problems, also closes. This means individuals facing hardship from an IRS action cannot seek assistance from TAS.
In-person services also cease, and all IRS Taxpayer Assistance Centers (TACs), which provide face-to-face help, are closed. Appointments for audits, collections, or appeals are canceled and must be rescheduled after the agency reopens. This leaves taxpayers with few options for direct engagement with IRS personnel.
The primary resource for taxpayers is the IRS.gov website, which remains accessible for downloading forms and reading publications, though some interactive features may be unavailable. Correspondence mailed to the IRS will be delivered but not opened or processed until after the shutdown ends.
Status of Enforcement Activities
A government shutdown curtails the IRS’s enforcement capabilities. Most new enforcement actions that require staff intervention, such as starting new audits or executing levies, are suspended. However, some automated compliance actions continue. Taxpayers may still receive automatically generated notices for issues like unfiled returns or math errors, but any resolution requiring human intervention will be delayed.
Legal deadlines related to tax disputes are not postponed by a shutdown. For example, the statutory deadline for filing a petition with the U.S. Tax Court to challenge an IRS determination remains in effect. Taxpayers must adhere to these dates to preserve their rights, as missing a deadline could result in the loss of the ability to contest a tax liability in court.