Let’s Talk About Tax

On November 5, 2025, the U.S. government shutdown became the longest in history. The shutdown has disrupted many Americans’ businesses, benefits and travel plans. But little attention has been given to the shutdown’s effects on taxpayers and the operation of and administration by the IRS.

The IRS has been forced to limit some key operations during the shutdown. The agency halted almost all refunds and significantly reduced its live telephone customer service assistance. However, taxpayers are still required to file all returns as normal. Unfortunately, taxpayers and practitioners now have little support and fewer resources when questions arise during the return preparation and filing process.

Federal workforce cuts have compounded the shutdown’s effects. The IRS employed approximately 100,000 workers at the start of 2025. The so-called Department of Government Efficiency (DOGE) reduced that number to roughly 75,000. Since October 8, the IRS furloughed about half of its employees due to the government shutdown. Of the furloughed employees, about 112 were recalled, mostly concentrated in the chief counsel and chief financial officer offices. This leaves the agency with a skeleton crew of roughly 40,000 employees.

Recissions to IRS funding have also hampered the agency’s ability to weather the government shutdown. In 2022, Congress appropriated nearly $80 billion for the IRS as part of the Inflation Reduction Act (IRA). This funding was intended to, among other things, materially update the Service’s computer systems. Congress and the White House later rescinded much of the funding. The Service is now subject to the “double trouble” of materially reduced personnel and outdated technology.

Long-term, the shutdown, workforce reductions and funding cuts raise concerns about the IRS’s ability to recruit, train and develop enough revenue agents to serve America’s taxpayers and the institution’s ability to respond timely to the overwhelming systemic demands. If the Service is unable to attract enough talent and expertise due to funding cuts and political gridlock, taxpayers and practitioners may face longer wait times and more uncertainty. This could particularly impact taxpayers relying on pending refund claims, credits, appeals proceedings and offers in compromise.

With no clear end to the shutdown in sight, taxpayers are encouraged to proactively contact their tax preparers and tax counsel. It will be crucial for these advisors to have as much lead time as possible to identify any issues, ensure the continuing integrity of our self-assessment system and resolve any questions from their clients before filing due dates.