IRS Halts Most Operations and Furloughs Employees Amid Ongoing Shutdown: What You Need to Know

The IRS has begun sending out furlough notices, shutting down most of its operations due to a prolonged government shutdown. Effective Wednesday, many employees are being placed on furlough as the agency deals with a lack of funding.

The IRS had initially kept all employees on the job for the first few days of the shutdown. However, as funding issues persisted beyond October 7, a full furlough kicked in. The IRS now states that most employees are non-pay until further notice, although some may continue based on their roles.

According to the IRS, employees who are furloughed will be compensated once the government reopens. This follows the Government Employee Fair Treatment Act of 2019, which ensures pay for federal workers affected by funding lapses. However, recent talks in the Office of Management and Budget suggest that back pay might not be automatically guaranteed this time.

Congressional leaders have shown concern over this potential change. House Speaker Mike Johnson emphasized that the historical norm is for federal employees to receive pay during shutdowns. He stated, “They should not be subjected to harm and financial dire straits.” This sentiment reflects a bipartisan commitment to protect workers, though legal opinions on the matter are varied.

Meanwhile, employees will have some time to wrap up their work responsibilities before the shutdown takes full effect. They’ll need to update voicemails and emails and are receiving official notifications regarding their furlough status.

Interestingly, the IRS has shifted strategies compared to past administrations. Under the Trump administration, the agency was more reliant on funding from the Inflation Reduction Act to maintain operations, whereas current plans under the Biden administration include stricter funding protocols and limits. This shift highlights evolving governmental responses to budgetary crises.

Recent data suggests that federal government shutdowns have become more common in the last decade, with economic impacts that ripple across various sectors. For instance, the 2018-2019 shutdown lasted 35 days, leading to significant disturbances not just for federal workers but also for the economy at large, affecting everything from tax refunds to unemployment claims.

As the IRS prepares for the upcoming tax season, it faces challenges not just from the shutdown but also from expected changes in the tax code introduced by the “Big Beautiful Bill” signed into law in July by then-President Trump. These changes are aimed at reforming the tax system, further complicating the agency’s already strained operations.

Overall, this shutdown is raising questions about employee rights, government efficiency, and how future funding battles will be handled. While the immediate situation appears tricky, the response from Congress and public opinion will be critical in shaping the next steps for affected federal employees.

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