How the Government Shutdown Impacts IRS Operations

As of October 2025, the federal government has entered a lapse in appropriations, and the shutdown is now underway. The Internal Revenue Service has confirmed that IRS operations are limited during this period. Despite that, the underlying tax law remains in effect, and all taxpayers must continue to meet their obligations as normal.

Government Shutdown and IRS Key Details

IRS Operations During the Lapse

The Internal Revenue Service has not closed entirely, but its operations are significantly limited due to the current lapse in appropriations. The agency has confirmed that certain automated systems, enforcement priorities, and filing-season preparation work continue, while many taxpayer services requiring staff involvement have been suspended or reduced.

Services That Continue

Several IRS functions remain active during the lapse. Electronic filing is available, and payments and remittances are being accepted and processed, whether submitted electronically or by mail. IRS.gov remains operational, along with automated tools such as Where's My Refund, the IRS2Go app, and online payment agreements. Most automated toll-free telephone applications are also still running. Limited live telephone customer service assistance is available, though callers should expect reduced capacity. Criminal investigation continues, as does compliance work to protect statutes of limitations. The IRS is also continuing critical filing-season preparation activities ahead of the 2026 filing season.

Services That Pause

A number of services have been suspended or reduced. Walk-in Taxpayer Assistance Centers are closed, and all in-person appointments have been canceled until normal operations resume. Appointments related to the Independent Office of Appeals and the Taxpayer Advocate Service have also been canceled; the IRS will reschedule those when it reopens. Refund delays are a real concern for many filers: refunds are generally not issued during this period. The one exception is for individual taxpayers who file a Form 1040 electronically, error-free, and elect direct deposit — those returns can be automatically processed and refunds issued without staff intervention. Paper returns can still be filed, but their processing will be delayed until full government operations resume. The IRS will generally not respond to paper correspondence during the shutdown, and taxpayers who mail in correspondence should expect a longer delay once operations fully resume. Applications for tax-exempt status and pension plan determinations will not be processed during this period.

Lessons From Past Shutdowns

Prior shutdowns have shown that even brief lapses can have a lasting effect on taxpayer services and agency workloads. When funding is restored, the IRS typically faces a significant backlog of correspondence, paper returns, and pending determinations that accumulated during the closure. These experiences underscore why filing electronically and planning ahead are especially important during a government shutdown.

Federal Government Shutdown Background

How A Funding Lapse Happens

A government shutdown occurs when Congress fails to pass a spending bill or continuing resolution before the start of the new fiscal year on October 1. Without approved appropriations, federal agencies cannot legally operate at normal staffing levels. The Office of Management and Budget directs each department to prepare a contingency plan to manage operations during a lapse in funding.

Impact On Federal Agencies And Workers

When a funding lapse begins, agencies designate essential workers who must continue reporting — often without pay until the shutdown ends. Non-essential employees are furloughed. In past shutdowns, federal workers across a range of agencies have experienced delayed paychecks, though back pay has typically been authorized once government funding is restored.

IRS Experience In Past Shutdowns

The IRS has navigated funding lapses before, and those experiences have shaped its current approach. Past shutdowns disrupted filing seasons, created refund delays for millions of taxpayers, and placed significant strain on IRS staff. The agency's current operational posture during the lapse reflects those lessons, prioritizing automated processing and critical enforcement functions while scaling back services that require direct staff involvement.

How The Current Lapse Changes Taxpayer Services And IRS Operations

What Taxpayers Should Expect

During the current lapse in appropriations, taxpayers should expect limited access to IRS assistance and slower processing for anything requiring staff involvement. Refunds will generally not be issued, except for electronically filed, error-free Form 1040 returns that qualify for automatic processing and direct deposit. Walk-in Taxpayer Assistance Centers are closed. Live telephone assistance is available on a limited basis, while most automated phone applications remain active. Paper returns can be submitted, but will not be processed until the IRS returns to full operations. Taxpayers who need transcripts or income verification should use the automated tools available through IRS.gov, including the Income Verification Express Service (IVES).

One point that cannot be overstated: all tax deadlines remain in effect. The shutdown does not suspend filing or payment obligations for individuals, corporations, partnerships, or employers. Payroll tax deadlines are also unchanged.

Steps To Minimize Disruption

Taxpayers are advised to file electronically and elect direct deposit for refunds to take advantage of the one category of refunds that will continue to be issued during the lapse. Keeping records of all submissions and correspondence is important, since follow-ups and responses may take longer once the agency is fully staffed again. Families relying on refunds for household expenses should plan for the possibility that funds arrive later than expected if their return does not qualify for the automatic processing exception.

Guidance For Tax Professionals

Tax professionals should make clear to clients that all filings are still due on schedule — extensions, payments, and returns are unaffected by the lapse. The IRS has confirmed that all tax deadlines, including payroll tax deadlines, remain in effect. Advisors should encourage clients to file electronically and use direct deposit wherever possible. Communication with the IRS will be limited during the shutdown, so practitioners should set realistic expectations around response times for correspondence, amended returns, and pending determinations. Using IRS.gov's automated tools and transcript services is the most reliable way to access account information in the interim.

Sources

The IRS issued a formal statement on October 21, 2025, confirming that operations are limited during the current lapse in appropriations and that all tax deadlines remain in effect. That statement is available at IRS.gov. A detailed listing of IRS operational status during the shutdown is available in the IRS lapse plan published at Treasury.gov.

By William Mc Lee, Editor-in-Chief & Tax Expert—Get Tax Relief Now