What Happens at the IRS During a Government Shutdown? How It Affects Taxpayers

FEDERAL GOVERNMENT SHUTDOWN

When the federal government shuts down, many agencies reduce or suspend normal operations. As tax season approaches or continues, businesses and individuals alike often ask: What services does the IRS provide during a shutdown? Understanding which IRS functions remain active—and which are paused—is essential for taxpayers.

In this post we’ll walk through:

• What happens to the IRS during a government shutdown

• The services that remain available

• What’s put ‘on hold’

• Practical steps for taxpayers and advisors to manage the impact

  
  

Why the IRS Is Affected During a Government Shutdown

A government shutdown occurs when Congress fails to pass funding bills or temporary extensions (continuing resolutions) for federal agencies. While tax-collection functions are self-funded to some degree, many support services rely on annual appropriations or discretionary funding. When funding lapses, the IRS must operate with a reduced workforce and limited resources until the shutdown ends.

What IRS Services Typically Continue

Despite the disruption caused by a shutdown, many core IRS functions may remain active, including:

• Processing of electronic tax returns (especially e-filings)

• Collection of tax payments, including penalties and interest

• Secure transmission channels (for example, for tax professionals using e-file)

• Enforcement of certain urgent or mandated aspects of tax law

  
  

It's important that you continue to meet filing deadlines, remit payments when due, and preserve applicable defenses remains critical—even in a shutdown environment.

What IRS Services May Be Suspended or Delayed

On the flip side, non-essential or support-type services are most likely to be curtailed. These include:

• Customer service call centers: wait times may dramatically increase or lines may be closed

• Pre-authorization for certain relief or installment-agreements (in some cases)

• Audit correspondence or initial contact letters may be delayed or paused

• Publication or updating of IRS guidance, forms, and notices may be slower

• Outreach, education programs, and certain taxpayer-assistance centers may close

  
  

Delays in reviewing K-1s, obtaining transcripts, or working with IRS personnel may become more common. Advance planning and conservative management are therefore key.

Advice During the Shutdown

Here are practical steps to safeguard your interests:

1. Re-emphasize deadlines – Filing and payment deadlines do not shift because of a shutdown unless Congress explicitly acts. Late filings still risk penalties and interest.

2. E-filing – Electronic returns are more likely to be processed even during a shutdown; paper returns may face greater delays.

3. Document communications – Given that IRS responsiveness may decline, maintain detailed records of all submissions, notices, and outreach.

4. Prepare for longer wait times – When working with the IRS (e.g., for installment agreements, notices, or relief applications), build in buffer time for delays.

5. Monitor IRS statements – The IRS may publish updates on its service levels, but during a shutdown such updates may slow or cease; keep alternative channels (tax-forum, professional associations) in view.

6. Manage expectations – potential for slower replies and set realistic timelines for deliverables and issues.

   
   

Conclusion

A government shutdown doesn’t halt all IRS activity, but it does affect many support services and may slow down routine procedures. For businesses, individuals, and legal professionals, the key takeaways are: don’t assume everything is paused, keep compliance-timelines in mind, and prepare for delays.