IRS Would Still Operate During a Shutdown Published March 14, 2025
The threat of a government shutdown appears to be receding Friday, but the IRS would nevertheless still operate during tax season, even at lower capacity, in the event of a shutdown.
“During a shutdown, the IRS operates with a limited workforce,” said Misty Erickson, a tax content program manager at the National Association of Tax Professionals. “While e-filed returns may continue to be processed, paper returns and those requiring manual intervention could face delays. If there is a shutdown, filing electronically can help ensure there is no delay in return processing.”
IRS acting commissioner Melanie Krause sent an email to employees on Thursday telling them they would be exempt from furloughs “due to existing appropriations,” which apparently come from the Inflation Reduction Act, according to a newly updated contingency plan from the Treasury Department. The IRS would be able to operate fully staffed for at least five days. However, the continuing resolution that was largely passed by House Republicans and that the Senate needs to pass by Friday night with the help of some Senate Democrats would cut another $20.2 billion in funding from the IRS funding under the Inflation Reduction Act, after two successive cuts of over $20 billion in the past two years.
Amid the uncertainty, the Treasury released a statement that may have been a way to pressure Democrats into agreeing to pass the continuing resolution. “The Treasury put out a statement that if there were a shutdown, they were going to fund the IRS through April 30, with all of it 100% open, which means it would not cause a problem for the f iling season, but then after April 30, the IRS would go to zero,” said Tax Guard CEO Hansen Rada. “Based on the Treasury’s announcement yesterday, it looks like they would get through the filing season and then shut it all down.”