IRS shutdown plan: Employees stay on the job for first 5 workdays

All IRS staffers will work during the first five business days of a potential government shutdown, according to a lapsed appropriations contingency plan posted Monday.

The plan said that money from the Inflation Reduction Act of 2022, P.L. 117-169, will pay salaries. The IRS has more than 74,000 employees when adjusted for the deferred resignation plan, according to the contingency plan for fiscal year 2026. Federal employees who work during a shutdown are not paid until the shutdown ends.

The IRS’s original Inflation Reduction Act funding, $79.4 billion over 10 years, was reduced to $37.6 billion through congressional cuts as of March, according to an August report by the Treasury Inspector General for Tax Administration. As of March 31, the IRS had spent about $13.8 billion of that funding, the report said.

“With this funding the IRS will not experience a lapse in appropriations on October 1, 2025, and normal IRS operations will continue,” the contingency plan said.

The government will shut down at 12:01 a.m. Wednesday unless Congress can agree to a continuing resolution to keep it operating. The U.S. House of Representatives passed a bill to keep the government funded for seven more weeks. It remains stuck in the Senate, whose rules mean a temporary measure to keep the government open would need at least seven Democratic votes and all 53 Republican votes to get the necessary 60 votes.

The IRS posted the plan as it is required to do but does not expect it to be necessary, the agency said in the plan. “While we do not anticipate using the plan, prudent management requires that agencies prepare for this contingency,” the plan said.

Earlier Monday, before the IRS posted the contingency plan, the AICPA urged the IRS to keep all employees working during a shutdown.

In a letter to the IRS, the AICPA cited deadlines for taxpayers and tax practitioners as a reason the IRS should maintain full staffing, including extended 2024 tax returns due by Oct. 15, tax-exempt organization returns due Nov. 17, and expatriate tax returns due Dec. 15. A government shutdown also could delay the filing season that normally would start in mid-January and the issuance of guidance for H.R. 1, P.L. 119-21, commonly known as the One Big Beautiful Bill Act, the letter said.

— To comment on this article or to suggest an idea for another article, contact Martha Waggoner at Martha.Waggoner@aicpa-cima.com.