IRS furloughs and service disruptions: How taxpayers can navigate uncertainty
As of October 15, the IRS has reportedly furloughed approximately 46% of its workforce — over 34,000 employees — leaving about 53.6% of staff on duty. This significant reduction in personnel is having a noticeable impact on IRS operations, which may affect your tax matters and what steps you can take to stay ahead.
Impact of IRS furloughs
The furlough has affected many core IRS functions, including call centers, IT support and headquarters operations. The agency is now operating under a contingency plan that prioritizes only “essential” or “excepted” services.
These classifications are determined by the Treasury Department and the IRS, and may evolve depending on funding availability, legal interpretations or internal policy shifts. It’s also important to understand that even employees initially deemed “excepted” could be furloughed later if they take leave beyond certain thresholds or if operational criteria change.
While some automated systems remain functional, delays are still likely. For example, even if a tax return is electronically filed and accepted, any refund requiring manual verification could be delayed due to limited staffing. Similarly, correspondence or paper filings may sit unprocessed until full operations resume.
IRS services likely to continue
Based on current reports, contingency plans and historical precedents from past government shutdowns, the following IRS services are expected to continue — albeit in a reduced capacity:
- Automated processing of e-filed returns: Electronic filings are still being accepted and processed by automated systems.
- Issuing tax refunds: Refunds that do not require manual review or intervention are likely to be issued.
- Electronic Federal Tax Payment System (EFTPS): Taxpayers can still make payments electronically through EFTPS.
- Automated collections and enforcement: Certain enforcement actions, such as automated notices or levies, may continue.
- Emergency or hardship relief: Requests for levy releases or other hardship-related relief may be processed if deemed urgent.
If your tax situation falls into one of these categories, you may not experience a major disruption. However, even these services could slow down if staffing continues to dwindle or if system maintenance is impacted.
IRS services likely to be suspended or delayed
Unfortunately, many IRS services that rely on human interaction or manual review are either suspended or significantly delayed. These include:
- IRS phone support and taxpayer helplines: Most call centers are impacted, making it difficult to get live assistance.
- In-person assistance at taxpayer assistance centers (TACs): These centers are largely closed or operating with minimal staff.
- Processing of paper returns and correspondence: Expect delays in any paper-based filings or mailed responses.
- New audits and examinations: Nonessential audits are paused, though existing cases may continue under limited staffing.
- Issuance of IRS notices and responses to correspondence: Many notices and taxpayer replies are not being processed.
- Applications for tax-exempt status: These are delayed due to the need for manual review.
- Legal and regulatory guidance: New rulemakings, interpretation and guidance are on hold.
- Verification services: Income verification for mortgages, loans and other financial applications may be delayed.
Stay proactive
If you have pending IRS matters — whether it’s a refund, audit, correspondence or application — it’s important to stay proactive. Document all communications, keep copies of filings and monitor your IRS account online where possible. If you’re facing a hardship or need urgent relief, your case may qualify for “excepted” processing.
How Wipfli can help
Wipfli tax advisors are here to help you navigate these furlough-related disruptions. We’re closely monitoring developments and are ready to assist you with strategies to minimize delays and protect your interests. Whether you’re a business owner waiting on a refund, a nonprofit seeking tax-exempt status or an individual needing verification for a mortgage, we’ll work with you to explore alternatives and advocate on your behalf.
Navigate tax uncertainty