The IRS will furlough roughly two-thirds of its employees if Congress fails to reach a deal to keep the government open, according to the contingency plan the U.S. Treasury Department released late Thursday. During the first five business days following the shutdown, the IRS will keep 30,063 of its 89,944 employees at work. The 144-page plan features a detailed breakdown of which IRS employees will be furloughed and which would continue working.
A shutdown of the federal government would begin Oct. 1 if Congress does not pass the 12 appropriations bills necessary to fund the government for the 2024 fiscal year. Congress could also choose to enact a continuing resolution maintaining the budget at last year’s levels for a specified time period while budget negotiations continue. If the shutdown lasts more than five days, the IRS said it will need to reassess its ongoing activities to identify the necessary personnel adjustments.
During the shutdown, NATP members should expect slower IRS response time for mailed documents, increased processing time for paper-filed returns, no non-automated refunds and few available call-in resources. However, there are expected to be few disruptions for e-filed returns and automated refunds. Members should also let their clients know that most taxpayer assistance call centers will be closed.
Should the shutdown continue into filing season — or should another shutdown occur during the 2024 season — the IRS will continue the return processing activities necessary to protect government property, which includes tax revenue, and maintain the integrity of the tax collection process. The 2024 filing season runs from Jan. 1 through April 30, 2024.
What IRS activities will stop?
A summary of significant IRS activities that will stop during the shutdown includes:
- All audit functions and return examinations
- Issuing non-automated refunds
- Non-automated collections
- Taxpayer services, such as responding to taxpayer questions outside of filing season
- Legal work on any actions paused during the shutdown
- Processing of non-disaster relief transcripts
- Most headquarters and administrative functions that are not related to the safety of life and protection of property
Which IRS activities will continue?
The following is a brief list of the IRS functions that are expected to continue during the shutdown:
- Designing and printing forms for the upcoming tax season
- Mail processing
- Maintaining criminal law enforcement and undercover operations
- Completing and testing programs for the upcoming filing year
- Processing remittances, including Payment Perfection
- Taxpayer services during filing season
- Processing disaster relief transcripts
- Implementing initiatives included in the Inflation Reduction Act (not funded through appropriations)
We will continue to keep our members informed of shutdown-related operational changes at the IRS that may have an impact on their practices.
About National Association of Tax ProfessionalsThe National Association of Tax Professionals (NATP) is the largest association dedicated to equipping tax professionals with the resources, connections and education they need to provide the highest level of service to their clients. NATP is comprised of over 23,000 leading tax professionals who believe in a superior standard of ethics and exemplify professional excellence. Members rely on NATP to deliver professional connections, content expertise and advocacy that provides them with the support they need to best serve their clients. The organization welcomes all tax professionals in their quest to continually meet the needs of the public, no matter where they are in their careers.
The NATP headquarters is located in Appleton, WI. To learn more, visit www.natptax.com.
Information included in this article is accurate as of the publish date. This post is not reflective of tax law changes or IRS guidance that may have occurred after the date of publishing.