IRS Furloughs Nearly 35,000 Employees, Says Most Operations Closed

Oct 10

In an updated contingency plan on Oct. 8, the Treasury Department indicated that 39,870 IRS workers, or 53.6% of the agency's total employee population of 74,299, are designated "exempt" and are expected to continue working during the shutdown.

The IRS said Wednesday that due to a lapse in appropriations, most agency operations have been paused until lawmakers reach a deal to end the federal government shutdown, while an updated IRS contingency plan shows that approximately 35,000 employees not identified as exempt have been furloughed.

In the latest fiscal year 2026 lapsed appropriation contingency plan for the IRS, posted early Wednesday afternoon, the Treasury Department indicated that 39,870 workers, or 53.6% of the total employee population of 74,299, are designated “exempt” and are expected to continue working with pay during the shutdown.

The remaining 34,429 IRS employees have been furloughed until the shutdown ends.

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IRS September 30, 2025

Treasury Department Lays Out IRS Contingency Plan as Shutdown Nears

“The IRS Lapse in Appropriations Contingency Plan describes actions and activities for the first five (5) business days starting October 8, 2025 should a lapse in appropriation occur,” the updated contingency plan states. “In the event the lapse lasts longer than five days, we recognize that additional challenges may arise. To address these concerns, the Chief Operating Officer will host daily calls with the Senior Executive Team to discuss any issues and major challenges related to staffing and operations.”

The following are the number of IRS exempt employees by office/division, as of now, according to the contingency plan:

Office of the Commissioner: 22
Chief Operations Office: 25
Chief Risk Office: 4
Appeals: 129
Chief Counsel Office: 413
Office of the CFO: 91
Communications and Liaison: 43
Criminal Investigation: 3,001
Facilities Management and Security Services: 184
Human Capital Office: 400
Information Technology: 4,552
Large Business and International Division: 1,039
Office of Professional Responsibility: 3
Online Services: 20
Privacy, Government Liaison and Disclosure: 31
Procurement: 114
Research, Applied Analytics and Statistics: 52
Return Preparer Office: 8
Small Business/Self-Employed Division: 4,911
Tax Compliance Officer: 5
Tax Exempt Government Entities Division: 249
Taxpayer Advocate Service: 93
Taxpayer Services: 24,470
Whistleblower Office: 11

However, all Taxpayer Advocate Service offices in the U.S. have now temporarily closed due to the shutdown and staff won’t be available to assist taxpayers during this time.

“Employees who are not exempt or excepted are furloughed and placed in a non-pay and non-duty status until further notice; however, all employees should plan to report to work for their next tour of duty,” the IRS said in a message posted on its website earlier this morning. “Employees will be given up to four hours to close out work requirements and receive formal furlough notification.”

A memo sent to all IRS employees this morning from David Traynor, acting human capital officer at the IRS, states, in part:

This memorandum is to advise you that Congress has not passed an appropriation for Fiscal Year 2026 or a Continuing Resolution; therefore, you will be furloughed beginning today, October 8, 2025.
This furlough is being initiated under the authority of 5 CFR Part 752, Subpart D (non-SES and Schedule C employees) and 5 CFR Part 359, Subpart H (career SES appointees). The absence of continued funding is an emergency under these regulations. As a result, the 30-day advance notice is not being provided under 5 CFR Part 752, Subpart D (non-SES and Schedule C employees) and 5 CFR Part 359, Subpart H (career SES appointees).
When you are on furlough, you will be in non-pay, non-duty status. Paid leave, such as annual, sick, court or military leave, which has been approved for this furlough period is cancelled. Also, during the furlough, you must remain away from your workplace (if you are reporting for work at your post of duty) and you are prohibited by law from working, even on a voluntary basis. If you are in travel status at the time of furlough, return home unless otherwise directed by your manager.
All employees are receiving this memorandum; however, some employees in your competitive level (generally, positions at the same grade level and classification series, the duties of which are generally interchangeable) are not being furloughed, because they have been excepted or exempt from the furlough based on their specific duties. Unless you have received specific notification that you are excepted or exempt from the furlough, you are being furloughed beginning October 8, 2025.
For those employees who have been notified that you are excepted or exempt from the furlough you can anticipate a subsequent memorandum from your Business Operating Division outlining the specific instructions for your excepted or exempt status.
During the furlough, you may get information from the media about the status of the furlough. When you hear that a Continuing Resolution or an FY 2026 appropriation has been approved, you will be expected to report to work no later than four (4) hours after that announcement, if it occurs on a workday. Otherwise, you should report at your normal start time on your next regularly scheduled workday. In the event the announcement contains more specific instructions on when to report to work, you will be expected to follow those instructions.

The memo goes on to say: “Although you will be placed in non-pay and non-duty status during the furlough, the Government Employee Fair Treatment Act of 2019 requires employees of the federal government who are furloughed or required to work during a lapse in appropriations to be compensated for the period of the lapse. The employees must be compensated on the earliest date possible after the lapse ends, regardless of scheduled pay dates. Employees required to work during the lapse in appropriations may use leave.”

The memo references a law signed during the 35-day government shutdown in 2018-19 during the first Trump administration. The law has widely been interpreted as guaranteeing furloughed workers would be compensated during future shutdowns. But a recent memo from the Office of Management and Budget contends that the law has been misconstrued and the back pay is not guaranteed.

The IRS may have jumped the gun by telling furloughed workers that they would be compensated after the shutdown ends. In a message posted on its website on Thursday, which was also emailed to employees, the agency said, “An earlier memo circulated on furlough guidance [from Traynor] incorrectly stated the nature of the Government Employee Fair Treatment Act of 2019 as it relates to compensation for non-pay and non-duty status. The Office of Management and Budget will provide further guidance on this issue, and you will be updated accordingly. Again, we will make every effort to keep you informed as additional information regarding the Agency funding level becomes available.”

The shutdown comes as the IRS works to implement President Donald Trump’s signature tax-and-spending law, the One Big Beautiful Bill Act, and as the Oct. 15 deadline looms for individuals and companies filing taxes with extensions.

“Due to the government shutdown the American people lost access to many vital services provided by the IRS when the agency furloughed thousands of employees,” the National Treasury Employees Union, which represents workers in 38 federal agencies and offices, said in a statement on Oct. 8. “Expect increased wait times, backlogs and delays implementing tax law changes as the shutdown continues. Taxpayers around the country will now have a much harder time getting the assistance they need, just as they get ready to file their extension returns due next week. Every day these employees are locked out of work is another day of frustration for taxpayers and a growing backlog of work that sits and waits for the shutdown to end. For frontline employees, the complete lack of planning left them in the dark about their work status until their supervisor informed them today. This is not the way our government should treat its dedicated nonpartisan public servants. We urge the administration and Congress to reach an agreement that reopens government and restores the services that Americans need and deserve.”

In a letter to the IRS last week, the American Institute of CPAs called for the agency to keep 100% of its workers for the entire length of the shutdown.

“Right now, taxpayers, C corporations, and tax advisors are working hard to meet the October 15th filing deadline—this can be stressful enough. An extended government shutdown during this important filing deadline will compound this anxiety if the IRS is not 100% staffed,” said Melanie Lauridsen, vice president of tax policy and advocacy with the AICPA.

She added: “An extended shutdown could potentially impact the start of the 2026 filing season, which would be detrimental to the government’s ability to collect revenue and issue critical guidance on the new tax law. Even a partial shutdown of the IRS for an extended period is deeply concerning, and we urge the IRS to retain its full staff until the shutdown is over.”