IRS Operations During a Government Shutdown
During a government shutdown, the IRS continues processing electronic tax returns and issuing refunds because these functions are funded by permanent appropriations and user fees. However, the agency largely stops non-essential activities, including audits, taxpayer assistance, and correspondence processing, until funding is restored. Most IRS employees are placed on furlough, reducing the agency’s capacity to handle phone calls, letters, and in-person taxpayer services. Forbes explains how IRS operations are affected during a shutdown.
The IRS typically maintains its online filing systems and direct deposit refunds because these are considered mission-critical. Paper returns, amended returns, and certain correspondence remain unprocessed until employees return. The agency also continues criminal investigations and enforcement actions related to serious tax crimes, while routine compliance activities pause. IRS official guidance on shutdown operations details which functions continue and which are suspended.
Impact on Taxpayers and Refund Timelines
Taxpayers who file electronically during a shutdown can still receive refunds, but processing times may lengthen due to reduced staffing. The IRS usually continues issuing refunds for returns already accepted, but new return processing may slow if the shutdown extends. Paper-filed returns and amended returns often remain in limbo until employees return to work. Forbes covers how IRS shutdown delays affect refund timelines.
Taxpayers seeking help through IRS phone lines, live chat, or in-person offices will face significant service disruptions because most assistance offices close and staff are furloughed. Collection activities, including new notices and enforcement letters, generally pause, but existing liens and levies may continue under certain circumstances. IRS taxpayer guidance during shutdowns outlines what to expect from collections and notices.
Historical Shutdowns and Current IRS Preparedness
Previous government shutdowns have repeatedly furloughed tens of thousands of IRS employees, delaying refund processing and taxpayer services. The 2018–2019 partial shutdown left most IRS workers furloughed for over a month, causing a significant backlog of returns and correspondence. Forbes reviews IRS performance during past shutdowns and highlights patterns in refund delays and service disruptions.
The IRS uses shutdown contingency plans that prioritize safety, security, and essential tax administration functions while furloughing non-essential staff. These plans are updated annually and outline which offices close, which systems remain online, and which taxpayer services are suspended. IRS contingency plans for shutdowns describe how the agency maintains core operations while minimizing disruption to taxpayers.