The Internal Revenue Service (IRS) is implementing widespread furloughs for its employees and suspending most of its operations as the current government shutdown continues beyond its initial contingency plan. On Wednesday morning, the agency updated its website to inform the public that “due to the lapse in appropriations, most IRS operations are closed.” This decision follows a brief period during which the IRS maintained its workforce for the first five business days of the shutdown, based on its initial contingency measures.
As the shutdown has extended past October 7, the IRS has commenced an “IRS-wide furlough,” affecting almost all employees except those already designated as excepted or exempt. At this point, the agency has not specified which employees will continue to work. The IRS has yet to release an updated contingency plan, leaving many employees uncertain about their status. According to the announcement on its website, “Employees who are not exempt or excepted are furloughed and placed in a non-pay and non-duty status until further notice; however, all employees should plan to report to work for their next tour of duty.”
A notice circulated among all IRS employees assures that those who are furloughed or are considered excepted will receive back pay once the shutdown concludes. However, recent discussions from the Office of Management and Budget (OMB) suggest that furloughed federal employees may not automatically receive this compensation. The OMB has proposed that Congress must explicitly authorize back pay for furloughed employees in any stopgap spending legislation.
Historically, legislation signed by former President Trump in January 2019, which ended a record 35-day government shutdown, guaranteed back pay to affected employees. The current notice reassures IRS employees that, “Although you will be placed in non-pay and non-duty status during the furlough, the Government Employee Fair Treatment Act of 2019 requires federal employees who are furloughed or required to work during a lapse in appropriations to be compensated for the period of the lapse.”
The OMB's recent memo has faced bipartisan criticism from congressional leaders. House Speaker Mike Johnson (R-La.) stated that according to his understanding of the law, furloughed federal employees are entitled to be compensated. Johnson emphasized, “It has always been the case — that is, tradition and I think statutory law — that federal employees be paid.” He expressed concern that federal employees should not face financial hardship due to the shutdown.
Employees affected by the furlough will be given up to four hours to finalize work requirements, such as updating their out-of-office voicemail and email messages, and will receive formal notifications of their furlough status. Acting Chief Human Capital Officer David Traynor clarified in a letter that some staff members are exempt from the furlough due to their specific duties. “Unless you have received specific notification that you are excepted or exempt from the furlough, you are being furloughed beginning October 8, 2025,” he stated.
The Trump administration had increasingly relied on funds from the Inflation Reduction Act to keep the IRS operational amid budget constraints. These funds were allocated to rebuild the IRS workforce and modernize outdated technology after years of budget cuts. Initially, the IRS planned to remain “fully operational” during a government shutdown by utilizing these funds, but later realized that there were limits to how these resources could be applied during a funding lapse. Consequently, the agency decided to furlough two-thirds of its workforce.
A spokesperson from the Treasury noted that IRS activities funded by the Inflation Reduction Act in fiscal 2023, or those that are excepted under longstanding governmentwide procedures during lapses in appropriations, would continue, while all other operations would come to a halt.
As the IRS braces for next year's filing season, it is also preparing for significant changes to the tax code resulting from the “Big Beautiful Bill” signed into law by President Donald Trump in July. Some of these changes are set to take effect as soon as the upcoming tax filing season begins.
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