The Internal Revenue Service (IRS) announced significant operational halts and a massive furlough affecting nearly half of its employees on Wednesday, a move that underscores the broad impacts of the ongoing government shutdown. The agency will continue to prioritize President Donald Trump's major tax reform initiatives and preparations for the upcoming tax filing season, but many other services will be suspended.

According to the IRS's contingency plan, the furloughs and operational shutdowns will affect several key areas, including taxpayer services and non-automated tax collections. Essential functions related to the safety of life and protection of property will continue, but most administrative and headquarters functions will pause.

This decision places approximately 34,429 IRS workers on unpaid leave, while 39,870 will remain working, making up 53.6 percent of the total workforce. The furloughs have sparked considerable backlash, particularly from the National Treasury Employees Union, which represents IRS workers.

Doreen Greenwald, the national president of the union, criticized the government's shutdown's effects, highlighting the loss of vital IRS services that Americans depend on, especially as many prepare to file their extension returns. "Expect increased wait times, backlogs, and delays in implementing tax law changes as the shutdown continues," Greenwald stated.

Initially, the IRS managed to avoid these drastic measures by utilizing special funding allocated by Congress in 2020, which kept the agency operational for five business days following the government's closure. However, as of October 8, 2025, a widespread furlough was enforced, affecting all employees not identified as excepted or exempt.

Compounding the uncertainty for IRS employees, a White House memo hinted that furloughed federal workers might not receive backpay, although a 2019 law signed by President Trump mandates that employees "must be compensated on the earliest date possible after the lapse ends."

The IRS has been at the forefront of implementing key tax cuts under the Trump administration, which eliminates taxes on tips, overtime, and Social Security—a move Republicans hope will bolster their prospects in next year's midterm elections.

IRS union leader Daniel Scharpenburg indicated that notifications to employees about the furloughs would continue throughout the day, signaling a period of significant adjustment for the agency and its workforce.

The Treasury Department has yet to respond to requests for comment on the unfolding situation. As the shutdown lingers, the full impact of these IRS cutbacks on both the public and the agency's employees remains to be seen.