Government Shutdown and IRS: What It Means for Taxpayers

A government shutdown raises concerns for taxpayers about how IRS operations will be affected. While the agency continues to provide many essential services during the early days of a funding lapse, more prolonged disruptions can delay support, complicate payment plans, and limit access to relief programs until the government reopens.

Do Payment Plans And Tax Relief Programs Still Operate?

Most IRS payment plans and relief programs continue during a government shutdown. Taxpayers can still apply online for short-term and long-term installment agreements. Those who already have an active plan should continue making their scheduled payments. These arrangements are designed to maintain a steady flow of money to the federal government, even as other services slow down.

Applications for Offers in Compromise, penalty relief, and other debt resolution tools also remain available through IRS.gov. While processing may take longer if the shutdown extends, online systems remain active, allowing taxpayers to manage their tax debt without waiting for the government to reopen. This ensures people stay in compliance and avoid extra penalties or fees during a funding lapse.

What Happens To The Taxpayer Advocate Service During A Shutdown?

The Taxpayer Advocate Service, an independent organization within the IRS, cannot assist taxpayers while the federal government is shut down. This creates a significant gap in support, as TAS is often the last resort for individuals facing urgent collection actions, such as wage garnishments, bank levies, or liens. Without its intervention, taxpayers may be left without immediate help during a critical time.

Although TAS services pause, IRS collections can continue to move forward. Taxpayers who are unable to reach the Advocate Service should document their hardship, including bills, medical costs, or proof of essential living expenses. Having this information ready will make it easier to resolve cases quickly once the government reopens and TAS staff return to work.

How Are IRS Employees Affected During A Government Shutdown?

Many IRS employees continue working during the early days of a government shutdown, but their pay may be delayed until Congress passes new appropriations. While the Inflation Reduction Act provides temporary funding, extended shutdowns often create uncertainty for workers who must remain on duty without immediate compensation. Once the shutdown ends, they typically receive back pay, but the gap can place financial strain on federal workers.

For taxpayers, the impact is seen in slower service and fewer staff available to handle calls, mail, and case management. Tax professionals and businesses that rely on timely IRS responses may also face disruptions, especially if the shutdown stretches into a new fiscal year. A significant reduction in staffing limits the speed at which issues are resolved, leaving many people waiting longer for answers and guidance.

Will IRS Collections Continue, And What Should Taxpayers Do?

IRS collection actions, such as levies, liens, and wage garnishments, can still proceed during a government shutdown. Even when support from the Taxpayer Advocate Service is unavailable, taxpayers remain responsible for their tax debt, and interest, penalties, and fees may continue to build. This means that someone could see money being taken from a bank account or wages withheld, even though federal agencies are otherwise limited in their operations.

To stay protected, taxpayers should continue filing their returns, make payments under existing agreements, and use the IRS online system to apply for relief if needed. Documenting financial hardship, including essential expenses and unpaid bills, will help speed up assistance when the government reopens. Taking action before the shutdown ends is the best way to avoid late fees, defaulting on a plan, or facing more severe collection measures.

What Role Do Congress And The Supreme Court Play In A Shutdown?

A government shutdown occurs when Congress fails to pass a budget or a temporary funding law to keep federal agencies operating. Without appropriations in place, many offices scale back or close until lawmakers in the House and Senate reach an agreement. These debates often center on fiscal year spending, and taxpayers are directly affected when negotiations stall.

In rare cases, disputes over government funding or agency authority may reach the Supreme Court. While the Court does not manage budgets, it can review laws or challenges tied to how funds are authorized and spent. This underscores how shutdowns are not only a matter of daily operations but also a question of law and governance that can affect taxpayers across the economy.

Sources

Information about IRS operations, relief programs, and payment options is available on the IRS.gov website. Legislative updates, appropriations measures, and federal budget activity can be found at Congress.gov. These resources offer accurate and up-to-date guidance from government agencies.