IRS furloughs nearly half of workforce as shutdown drags on

Caitlin Reilly, Bloomberg News on Oct 8, 2025

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The IRS will furlough just under half of its staff and pause most of the agency’s taxpayer services as gridlock in Congress pushes the government shutdown into its second week.

The plan released Wednesday, which calls for about 34,000 workers to be furloughed, represents a sharp departure from the first week of the shutdown. That outline allowed the agency’s 74,299 employees to continue working with pay by using leftover funding from the Biden administration.

The agency’s original shutdown contingency plan only stretched through Tuesday.

In a letter to staff Wednesday, the agency said furloughed workers would be paid after the shutdown ends, citing a 2019 law requiring back pay. The move contradicts a White House Budget Office draft memo saying that workers aren’t guaranteed pay during a shutdown and public musings from President Donald Trump that not all federal workers would be compensated.

The remaining 39,870 staff will work on preparing for next year’s filing season, modernizing the agency and implementing President Donald Trump’s new tax law. Deadlines for taxpayers still apply during a shutdown. Individuals and businesses that secured an extension on their 2024 taxes must file them on Oct. 15.

During the shutdown, the agency will limit taxpayer services, including answering calls. The Taxpayer Advocate Service, an independent organization within IRS, also announced Wednesday it would close because it’s out of funding.

“Taxpayers around the country will now have a much harder time getting the assistance they need, just as they get ready to file their extension returns due next week,” Doreen Greenwald, president of the National Treasury Employees Union, said in a statement.

Days into a 35-day shutdown beginning in December 2018, the IRS moved the opposite direction — recalling workers from furlough to prepare for the upcoming tax season and instituting “intermittent furloughs.” A report by the Government Accountability Office later found the IRS had a plan for a prolonged shutdown but sometimes failed to communicate it to employees.

But most agencies didn’t have a plan for an extended lapse, and so the Office of Management and Budget has instructed agencies to adapt their plans as the shutdown progresses. As a result, the 2025 shutdown has been more dynamic, with many federal workers moving on and off furlough status day-to-day.

(With assistance from Gregory Korte.)