The U.S. Internal Revenue Service (IRS) announced that beginning October 8, 2025, the agency will furlough nearly 34,000 employees—around 46 % of its workforce—as part of contingency measures triggered by the ongoing federal government shutdown.
With the shutdown entering its second week and no resolution in sight, the IRS’s move signals escalating disruption to tax operations and taxpayer services. Only 53.6 % of IRS staff, approximately 39,870 workers, will remain on duty to manage core functions. AP News
Why the Furloughs Are Happening Now
- The shutdown was triggered when Congress failed to pass funding legislation for the 2026 fiscal year by the October 1 deadline.
- The IRS had anticipated possible disruptions: its contingency plan stated that if the funding lapse continued beyond five business days, non-essential employees would be furloughed.
- Earlier in 2025, the IRS and other federal agencies had already undergone workforce reductions under the Department of Government Efficiency initiative, shrinking the agency’s capacity just ahead of this crisis. AP News
What Functions Are Affected — And What Aren’t
The furloughs will primarily affect:
- Call centers and taxpayer assistance services
- IT support, internal administration, and many headquarters operations
Reuters
Yet, some functions will remain active:
- Processing of tax returns and payments (especially if funds are available)
- Online systems and taxpayer verification operations
- Work tied to enforcing recently passed tax and spending laws
Reuters
Still, delays are anticipated across the board—even exempted tasks may slow due to downstream bottlenecks.
The Back Pay Dispute Adds a Wild Card
One of the more contentious issues is whether the furloughed workers will automatically receive back pay once the shutdown ends.
- The IRS maintains that under the Government Employee Fair Treatment Act of 2019 (GEFTA), federal employees are guaranteed compensation for the period they were furloughed after appropriations are restored.
- The White House Office of Management and Budget (OMB), however, floated a counterargument in a draft memo: the 2019 law does not explicitly make that back pay automatic, and payments should be contingent upon a future appropriation act.
- President Trump has hinted that not all furloughed employees will necessarily receive retroactive pay.
- The conflicting legal interpretations have created uncertainty and angered many affected workers. Axios
In short: even if the shutdown is resolved, there is no guarantee—or at least no consensus—that all furloughed IRS workers will get paid for the days they were off the job.
What It Means for Taxpayers
- Service disruptions: Expect longer wait times, backlogs in processing, and delayed responses to taxpayer inquiries. AP News
- Deadlines still stand: The IRS continues to enforce the October 15, 2025 filing deadline for individuals who got extensions. Penalties for late filing or underpayment will still apply. MarketWatch
- Refunds may lag: With reduced staffing and disrupted workflows, tax refunds and credits could be slower to process.
- Future implications: If the shutdown drags on, the IRS may struggle to catch up. The agency was already operating under constrained resources before this crisis.
Political Ramifications & Next Moves
- The partisan standoff in Congress hasn’t budged. Neither the GOP-led short-term funding bill (which would run through Nov. 21) nor the Democrats’ more expansive health-care–tied funding proposal has secured enough support.
- By introducing controversy over back pay, the executive branch may be increasing pressure on lawmakers—or trying to shift the narrative later about “who pays for this shutdown.”
- Regardless of how it ends, this episode can further erode confidence in government continuity and federal service reliability.
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