What Would a Government Shutdown Do to the IRS?
Some wonder how IRS operations would be affected if the government experiences a shutdown.


As has happened numerous times in recent years, the possibility of a government shutdown is spotlighting several federal agencies, including the IRS, and raising questions about what services might be impacted. (More on that below.)
Now those questions are arising again, with talk of a possible temporary government shutdown if lawmakers don't reach a funding agreement in time.
Additionally, the IRS is already in the news, not only due to a shutdown threat but also because of significant changes in its operations and leadership.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The agency successfully launched its Direct File program, an IRS-run tax prep and filing service where some taxpayers can file their federal tax returns directly with the agency — for free. Direct File is available this 2025 tax filing season, though not all states are signing up for the service.
And given Republican control of the White House and Congress, it's hard to say what will happen to the program in the future.
IRS tax concerns
Under the Biden administration, the IRS had been cracking down on fraud and tax scams while having eased its moratorium on processing new ERC tax credit claims.
The tax agency also wanted to hire 3,700 new agents to audit complex returns, though, as Kiplinger reported, the agency hit some roadblocks partly due to a lack of interest in the accounting field.
In addition to ramped-up enforcement efforts, the IRS recently touted gains such as reduced processing times, faster tax refunds, shorter wait times for taxpayer phone assistance, and improvements with paperless processing.
However, the agency is facing new challenges under the Trump administration.
Trump's pick for IRS Commissioner is a former congressman and auctioneer, Billy Long. If confirmed, Long's background and limited tax expertise would mark a significant leadership shift.
Additionally, the IRS is grappling with funding cuts and potentially significant reductions in its workforce along with layoffs and an indefinite hiring freeze that could impact its ability to carry out modernization, customer service, and compliance initiatives.
So, a question has been whether IRS enforcement activity and process improvement would halt if the federal government shut down. And what services would be shuttered?
Here’s what you need to know.
Government shutdown March 2025?
Before looking at the specifics of the IRS contingency plan, it's important to note that the latest government shutdown, feared for December 2024 was averted.
- The next key funding deadline is March 14, 2025, for lawmakers on Capitol Hill to reach a continuing resolution to fund the government.
- On March 11, the U.S. House of Representatives passed a continuing resolution (CR) with a vote of 217-213.
- The bill now moves to the Senate, where it faces an uncertain future. At least 8 Democrats would need to join Republicans to pass the bill.
As of mid-March, the threat of a shutdown is moderate. The current funding expires in a few days as the Senate considers the House resolution. Political divisions are deep and the Republican-led Congress is focused on Trump's budget demands.
What happens if the government shuts down?
In a government shutdown, most federal agencies and workers experience some impact. All "non-essential" work is forced to stop. However, federal agencies have backup plans and essential services continue to function — at varying levels. For example, critical services like Social Security, Medicare, and Medicaid payments continue.
Of course, anytime the federal government shuts down, significant impacts ripple throughout the U.S., affecting people across the U.S. in different ways.
President of the National Treasury Employees Union, Doreen Greenwald, has emphasized that “a government shutdown is not a harmless, DC drama. Federal employees in every American community will lose income, through no fault of their own and, in many cases, they will be locked out of doing the work they were hired to do for the American people,” Greenwald stated in a release.
NTEU represents federal workers in 35 departments and agencies.
Does the IRS close during a shutdown?
Initially, it was assumed that the IRS would function as usual during a government shutdown, as its operations could be sustained through IRA funding.
Then, reporting indicated that the IRS would likely partially shut down and potentially furlough thousands of its employees, which would significantly impact agency operations. Now, the Treasury Department is reportedly indicating that IRS staff would continue working (more on that below.)
Last year, the U.S. Treasury Department released an Internal Revenue Service contingency plan. Under that plan, it appears that in the event of a shutdown:
- Most core tax administration activity would typically stop.
- Nearly 60,000 IRS employees could be furloughed.
- Some services could continue, normally supported by only about a third of the IRS workforce.
These are just a few aspects of the plan. But it's hard to know exactly how the IRS would implement its contingency plan and how that might impact you and your taxes. Luckily, there hasn't been a government shutdown during tax filing season.
Update: As of March 13, Bloomberg reports that all IRS employees will continue to work if the government shuts down Friday. This is according to a memo reportedly sent to agency employees from Acting IRS Commissioner Melanie Krause.
However, it's hard to say exactly how the Trump administration leadership, which separately just announced planned 20% IRS workforce cuts for just after tax season, would handle a shutdown.
As a result, as the March 14 deadline approaches, stay informed about any potential impacts on your fax filing process and prepare for possible delays in refunds or communications from the IRS.
Note: This story has been updated to reflect recent developments.
Related Content
- IRS Shakeup: What's Trump's IRS Pick Could Mean for Your Taxes
- Trump's Hiring Freeze: What It Means for the IRS
- Filing Taxes 2025: Live Updates, Tax Tips and Strategies from Kiplinger
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

As the senior tax editor at Kiplinger.com, Kelley R. Taylor simplifies federal and state tax information, news, and developments to help empower readers. Kelley has over two decades of experience advising on and covering education, law, finance, and tax as a corporate attorney and business journalist.
-
Stock Market Today: Trump Retreats, Markets Rejoice
Stocks rally, yields soften, the dollar rises, and even beaten-down names enjoy the wages of potential trade peace.
By David Dittman
-
In Trump’s Economy Should 401(k) Savers 'Set It and Forget It?'
It’s hard to bury your head in the sand when the markets are volatile. Here’s when it makes sense and when it doesn’t.
By Donna Fuscaldo
-
Ask the Editor: Reader Questions, April 18 — Amended Returns
In our Ask the Editor: Taxes, April 18, round-up — Joy Taylor, The Kiplinger Tax Letter Editor, answers questions on amended returns, mortgages and deductions.
By Joy Taylor
-
How Many IRS Commissioners Have We Gone Through This Year?
IRS Who were the former IRS commissioners, and why did they resign? Find out how IRS turnover can impact your taxes.
By Kate Schubel
-
Tax Day 2025: Don’t Miss These Freebies, Food Deals and Discounts
Tax Day You can score some sweet deals on April 15 in some select restaurants like Burger King, Shake Shack, and more.
By Gabriella Cruz-Martínez
-
Tax Time: Does Your Kid Influencer Owe Taxes?
State Tax Some minors are making big money on social media. Here’s how to know if they need to file taxes.
By Gabriella Cruz-Martínez
-
Ask the Editor: Reader Questions, April 11 — IRAs, RMDs and PTPs.
Ask the Editor: Taxes, April 11, 2025 — Joy Taylor, The Kiplinger Tax Letter Editor, answers questions on Roth IRAs, RMDs and other retirement accounts.
By Joy Taylor
-
Trump Plans to Terminate IRS Direct File program
Tax Filing The IRS Direct File program was piloted last year in 12 states and has since expanded to 25. But will it last under the Trump administration?
By Gabriella Cruz-Martínez
-
Taxpayer Revolt? Why More People Are Avoiding Filing Taxes This Year
Tax Season It may be tempting to skip filing due to the overwhelmed IRS, but doing so could have financial and legal consequences.
By Kelley R. Taylor
-
U.S. Treasury to Eliminate Paper Checks: What It Means for Tax Refunds, Social Security
Treasury President Trump signed an executive order forcing the federal government to phase out paper check disbursements by the fall.
By Gabriella Cruz-Martínez