IRS Plans Five-Day Operations Amid Government Shutdown Using IRA Funds
IRS Plans Five-Day Operations Amid Government Shutdown Using IRA Funds

IRS Plans Five-Day Operations Amid Government Shutdown Using IRA Funds

News summary

The IRS has released a contingency plan stating that in the event of a government shutdown starting October 1, 2025, it will continue operations and keep all approximately 75,000 employees working for the first five business days by reallocating funds from the Inflation Reduction Act (IRA). This IRA funding, originally $79 billion allocated over ten years for modernization and enforcement, has been significantly reduced by Congress but still enables this temporary continuity. After five days, the IRS's ability to remain operational is uncertain, and employees would not be paid until the shutdown ends due to legal restrictions under the Anti-Deficiency Act. This approach marks a more aggressive reliance on IRA funds compared to prior administrations, aiming to avoid disruptions to tax processing and implementation of new tax code provisions signed into law by President Trump. However, the plan does not specify actions if the shutdown extends beyond five days, raising concerns about potential impacts on the 2026 tax filing season and IRS services. The IRS and professional associations emphasize the importance of full staffing to meet critical deadlines and taxpayer needs amid the funding uncertainty.

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