What’s going on at IRS During the Shutdown

Because of the way Congress structured supplemental funding under the Inflation Reduction Act, the IRS has a contingency plan that allows virtually all its employees to stay on duty, even if annual appropriations lapse. For at least the first five business days, IRS services—filing, refunds, audits, customer service—should continue as normal, funded from non-annual appropriations. 

What You Should Expect

• Filing / tax return processing: Since IRS is keeping operations via IRA funding, electronic filing systems and processing should keep working—at least initially.

• Refund issuance: Refunds likely will continue to be issued as usual in the short term.

• Enforcement & compliance: Audits, investigations, and normal compliance work may continue, subject to resource constraints.

• Customer service & help lines: IRS assistance (phone, digital) might remain active, though possibly slower or with reduced backup.

• IT backbone, data systems, modernization programs: Because they are tied to IRA funding in IRS’s plan, core IT and system support is expected to maintain.

• Shutdown wrap-up tasks: IRS staff will need to perform shutdown tasks (closing systems, halting new obligations, securing infrastructure) in about half a workday.

Risks to Watch

• Longer shutdown risk: If the shutdown persists beyond the initial days, the IRS may face resource exhaustion (even with IRA funds). The contingency plan does not detail operations beyond the first 5 business days. Current Federal Tax Developments+1

• New initiatives, expansions, or ramp-up programs: Projects not strictly part of core operations might be postponed.

• Guidance, rulemaking & policy releases: IRS may delay publishing new guidance, regulations, or interpretive rulings.

• Taxpayer correspondence / backlog: Delays in responding to letters, audits, appeals may increase.

• Office walk-ins / in-person services: Some physical offices may reduce hours or services.

• Complex / manual processing: Cases needing substantial manual intervention might lag if staffing or funding strains emerge.

• Uncertainty beyond five days: The longer the shutdown lasts, the greater the possibility of scaling back even functions currently considered essential.

Bottom Line

Right now, you should proceed with tax-related plans (filings, payments, compliance) assuming continued service. But expect possible delays and maintain flexibility. If the shutdown continues past the initial days, we may have to reassess. 

We'll keep you updated here as we learn more!