IRS Begins Worker Furloughs, Suspends Most Tax Operations (1)

The IRS Wednesday began furloughing workers as part of the federal government shutdown, with most operations closing, the agency’s site said.

Employees critical to agency operations—those who are working on the mega tax law implementation, filing season, and IT—will continue working, according to previous reporting by Bloomberg Tax. Nearly half the agency is furloughed.

The decision comes after the IRS spent the first week of the shutdown continuing normal operations using the 2022 tax-and-climate law funds. Some employees were notified last week that they would be furloughed if the lawmakers couldn’t hammer out a deal to fund the government by Wednesday.

The Treasury Department updated its contingency plan Wednesday, detailing that 39,870 employees will keep working.

Preparing forms for tax season and protection of statute expiration, bankruptcy, liens, and seizure cases will continue. However, operations like non-automated collections will stop.

The shutdown comes as the IRS works to issue rules to carry out the GOP’s tax-and-spending package, and as the Oct. 15 deadline approaches for individuals and companies filing for tax extensions.

The Taxpayer Advocate Service offices are also closed, the office said.

“An IRS-wide furlough began on October 8, 2025, for everyone except already-identified excepted and exempt employees,” the agency said.

Responding to remarks from President Donald Trump earlier this week that federal workers on furlough might not get paid when the shutdown ends, the Professional Managers Association Wednesday called on the administration to confirm that government employees—including the IRS managers it represents— would receive full, retroactive pay.

“We also urge Congress to provide any additional clarity necessary to prevent disruption and financial hardship for employees who are furloughed through no fault of their own,” the group said in a statement.