IRS to Maintain Operations Amid Possible Government Shutdown
In the event of a government shutdown, all IRS personnel will be required to work during the first five business days. A contingency plan released earlier has expired.
The funding from the 2022 Inflation Reduction Act will cover employee salaries. The IRS currently employs over 74,000 individuals, adjusted for a postponed resignation plan in line with the fiscal year 2026 contingency measures. It’s important to note that federal workers will not receive payment until the shutdown concludes.
An August report from the Department of Tax General Inspector indicated that the IRS originally received $79.4 billion in funding from the inflation reduction law over a ten-year period. However, due to Congressional cuts, that amount was reduced to $37.6 billion by March of this year. As of March 31, the IRS had utilized approximately $13.8 billion of these funds.
The contingency plan assures that with the current funding, the IRS will not run out of budget by October 1, 2025, enabling it to continue regular operations.
The government is set to shut down at 12:01 a.m. on Wednesday unless Congress reaches an agreement on a resolution to keep it functioning. The U.S. House of Representatives has passed a bill aimed at funding the government for an additional seven weeks, but it is currently stalled in the Senate. To keep the government open, all 53 Republican votes will be required along with at least seven Democratic votes to meet the necessary 60 votes.
The IRS has communicated that, although it has posted the plan, it does not anticipate needing to implement it. The agency stated, “We don’t expect to use this plan, but careful management requires that the agency prepare for this contingency.”
Prior to the IRS releasing its contingency plan, the AICPA had encouraged the agency to keep all employees active during any government shutdown, citing the need to meet taxpayer deadlines. They pointed out that deadlines for tax returns include extensions until October 15 and November 17 for the 2024 tax return and December 15 for foreign tax returns.
