NEWS
As the federal government shutdown enters its fourth week, the Internal Revenue Service is struggling to keep up with mounting backlogs that threaten the 2026 tax season. With more than 34,000 federal workers furloughed and correspondence piling up, the IRS backlog is slowing tax return processing and delaying millions of refunds nationwide.
The IRS newsroom confirmed that limited staffing began on October 8, 2025, when the shutdown forced the furlough of nearly half the agency’s workforce. Only essential functions—electronic filing, direct deposit processing, and criminal investigations—remain active.
Taxpayer Assistance Centers are closed, mail has gone unanswered, and paper returns continue to pile up. The IRS described the growing accumulation as a “correspondence backlog,” warning that full recovery may take months even after federal funding is restored.
A GAO report released in January 2025 found that the IRS was already missing its paper return targets before the shutdown, with an average processing time of 20 days for filings. With the shutdown halting mail operations, those delays are worsening.
“Limited federal funding has slowed every stage of IRS processing,” said a GAO oversight official. “Each week without a resolution extends the recovery timeline for taxpayers waiting on refunds.”
The IRS backlog reflects a wider strain on the federal government. The Federal Aviation Administration and air traffic controllers are working without pay, while the Food and Nutrition Services division warns that SNAP and WIC benefits could be delayed. The continuing funding lapse is testing the resilience of programs that millions of Americans rely on for income, safety, and food security.
Thousands of federal employees remain unpaid as lawmakers debate a continuing resolution. In Washington, Senate Democrats have pressed for a swift vote to reopen the government, while GOP lawmakers demand spending limits before approving new funding.
Senator Bernie Sanders called the ongoing shutdown “a manufactured crisis hurting working families, federal employees, and small businesses that rely on timely tax refunds.” He urged Congress to act, noting that delayed refund payments can push many Americans into debt or missed bills.
The IRS has cautioned that the shutdown could delay the start of the 2026 filing season. Training, system updates, and software testing have been postponed, and paper return processing has stopped entirely. “Every week of limited operations adds months to our recovery,” said an IRS spokesperson.
Taxpayers who file electronically with direct deposit are expected to fare best; however, those submitting paper returns may experience significant delays in refund processing once operations resume. Refunds requiring manual review will likely take longer to issue, creating a cascading backlog across the system.
The shutdown’s economic toll extends beyond the IRS. Businesses awaiting refunds or credits are facing cash-flow challenges, while delays in SNAP benefits and food programs have added pressure on low-income families. The Taxpayer Advocate Service warned that during the 2018–2019 shutdown, it took nearly a year for the IRS to clear its backlog—a scenario that could repeat if Congress fails to fund government operations soon.
In the Senate, Democrats are calling for a continuing resolution to restore full government operations. “The path forward depends on ending this shutdown immediately,” said Senator Patty Murray, chair of the Appropriations Committee. “Every day of delay increases costs and confusion for taxpayers.”
Republican senators argue that spending reforms are necessary before any funding bill is passed. “We need accountability before new spending,” one GOP lawmaker said. Despite partisan divisions, both sides acknowledge that the IRS backlog and delayed payments are worsening by the day.
Federal employees have now missed multiple pay periods. “This is not sustainable,” said a representative from the National Treasury Employees Union. “Federal workers are paying the price while doing their best to protect taxpayers and maintain services.”
Essential operations across the federal government—from the Federal Aviation Administration to Food and Nutrition Services—remain constrained. Each lost week adds to the workload and financial burden for both affected workers and taxpayers.
If Congress fails to act soon, the Treasury Department warns that the IRS may need to postpone the official start of the 2026 tax filing period. Updates to forms and systems could introduce errors, further slowing processing. “Full government operations must be restored to protect taxpayers,” a Treasury spokesperson said. “Without that, delays will continue deep into the next filing year.”
The IRS continues to advise taxpayers to file electronically and use direct deposit to avoid delays. “Taxpayers should be aware of these changes,” said an IRS official. “We are prioritizing electronic filings and issuing refunds as quickly as systems allow.” The agency has urged taxpayers not to mail paper returns until normal operations resume, to prevent further backlog growth.
The GAO has urged Congress to fund long-term technology upgrades to prevent future processing breakdowns. “Stable funding and modernization are critical for protecting taxpayers,” said a GAO analyst. Tax experts agree that recurring shutdowns only exacerbate administrative inefficiencies and delay refund payments, ultimately harming public trust in the federal tax system.
Both chambers of Congress are expected to revisit funding negotiations this week. Until a continuing resolution is passed, taxpayers and federal employees will continue to face payment delays and uncertainty. Lawmakers face growing pressure to restore federal funding, restart agency operations, and ensure the IRS can process tax returns and refunds without further disruption.
By William Mc Lee, Editor-in-Chief & Tax Expert—Get Tax Relief Now
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