October 9, 2025


IRS Retracts Assurance of Back Pay for Furloughed Workers, Creating Uncertainty Among Staff

In a surprising turn of events, the Internal Revenue Service (IRS) has reversed an earlier assurance that furloughed workers would receive back pay, creating unrest among its staff. This decision came shortly after the agency furloughed almost half of its workforce and initially indicated that these employees would be compensated retroactively, as per an internal email revealed by POLITICO.

According to the email sent to IRS employees, the previous guidance suggesting that the Government Employee Fair Treatment Act of 2019 guaranteed back pay for workers in non-pay and non-duty status was incorrect. "An earlier memo circulated on furlough guidance incorrectly stated the nature of the Government Employee Fair Treatment Act of 2019 as it relates to compensation," the email explained. It further noted that the Office of Management and Budget would be providing updated guidance.

This backtrack is a stark contrast to the IRS’ initial stance detailed in its furlough decision letter, which remains accessible on the agency's website. The letter states that “employees must be compensated on the earliest date possible after the [government funding] lapse ends, regardless of scheduled pay dates,” aligning with the 2019 law signed by then-President Donald Trump.

The shift in position follows a White House memo hinting that furloughed federal employees might not receive back pay, aligning with broader federal workforce reductions under the Trump administration. This year alone, the IRS has seen a significant reduction in staff, with over 26,000 workers leaving the agency.

Similar reversals on back pay were reported earlier in the week by the Interior Department, indicating a potentially broader policy shift affecting federal employees. These policy changes have left many to question the stability of federal careers, which have traditionally been seen as secure employment paths.

The Treasury Department has yet to comment on the issue, and the National Treasury Employees Union, which represents IRS workers, has also declined to comment. This situation leaves many federal employees in limbo, waiting for further clarification and hoping for resolutions that may secure their financial situations amidst the ongoing furloughs.