What happens during an IRS shutdown

Congress has until midnight tonight, Sept. 30, to pass a federal funding bill. If lawmakers fail to act, the government, including the IRS, will enter a partial shutdown beginning Oct. 1. However, the IRS has announced a contingency plan that provides some immediate relief. Thanks to remaining Inflation Reduction Act funding, all IRS employees will remain on the job for the first five business days of any shutdown. This means taxpayer services, processing and communications should continue through early next week without major disruption.

What happens after day five

Suppose a shutdown continues beyond the initial five days. In that case, IRS operations will scale back to “excepted” activities necessary to protect government property, enforce the tax code, or support life and safety. This could lead to:

• Slower refund processing
• Reduced phone and correspondence support
• Delays in issuing new guidance or responding to inquiries
• Suspension of some audit and appeals activities

Recommended actions for tax professionals

With uncertainty still looming, proactive planning is essential. Consider the following steps today and in the days ahead.

Before a potential shutdown and the first five business days (Today through Oct. 7):

• File and submit returns, extensions and elections now to avoid potential delays.
• Make all payments and deposits on time. Statutory obligations (e.g., payroll deposits, estimated tax payments) remain due even during a shutdown.
• Pull transcripts and submit Form 2848 POAs while systems are fully operational.
• Set expectations with clients about possible service delays and limited IRS availability after the five-day window.

If the shutdown extends beyond five business days:

• Monitor which services remain active. Be prepared for disruptions to processing, phone support and enforcement activities.
• Document reasonable cause if late filings or responses become unavoidable due to IRS delays.
• Protect statutory deadlines. Track refund and collection statute dates and act conservatively with protective filings.
• Communicate with clients about expected refund timing, notice responses and audit activity.

The IRS’s five-day staffing buffer gives practitioners a short window of stability. A prolonged shutdown could disrupt services. Remember, the prevailing tax law remains in effect, and all taxpayers should continue to meet their tax obligations as normal.

Common questions taxpayers have about the government shutdown

Do I still need to file my tax return?

Yes. Filing requirements don’t change during a shutdown. Returns should be filed on time, especially during the first five days when IRS systems are fully staffed.

What about payments like estimates or extension balances?

All tax payments and deposits are still due. Statutory obligations, such as payroll deposits and estimated payments, remain in effect even if IRS staff are limited.

Will my refund be delayed?

Not immediately. Refunds should continue to process normally in the first five business days. If the shutdown lasts longer, processing may slow and amended filings could be delayed.

What happens with audits and appeals?

Audit and appeals work may continue during the first five days. If the shutdown extends, these activities will slow or be suspended.

Can I get in-person help at a Taxpayer Assistance Center?

Yes, during the first five business days. Depending on staffing, access could be reduced or suspended after that.

Common questions tax professionals have about the government shutdown

How will this affect tax season and IRS guidance?

Operations should continue as usual during the first five days. New guidance, rulings, and notices may be delayed if the shutdown extends.

Which IRS workers are affected?

Thanks to Inflation Reduction Act funding, all IRS employees will remain on the job initially. After the first five business days, staffing will shrink to “excepted” roles needed to protect life, property and the tax system.

Will IRS stakeholder liaisons or the Taxpayer Advocate remain available?

Yes, in the short term. If the shutdown goes beyond five days, their availability may be reduced, with only essential functions continuing.

Can I still submit POAs or pull transcripts?

Yes, and you should do so within the initial five days while systems are fully functional. After that, processing may be delayed.

What happens with paper returns without payments?

They will continue to process during the first five days. If the shutdown extends, expect slower processing times or delays until staffing resumes.