IRS workforce slashed in half as government shutdown showdown stretches into second week

Nearly half of the IRS workforce — nearly 34,000 employees — faces furloughs as the government shutdown enters its second week, with the agency rolling out a contingency plan to keep key tax enforcement, data security, and filing-season operations running despite the lapse in congressional funding.

In a letter to staff Wednesday, the agency said most operations would shut down. The contingency plan, which takes effect Wednesday and runs through April 30, 2026, details how the IRS will operate without new congressional funding.

As of July 24, 2025, the IRS employed 74,299 people. During the shutdown, only 39,870 — about 54% — will stay on duty, though it’s unclear which positions will be retained.

Key operations that will continue to include tax processing to safeguard government revenue, IT and data-protection systems, criminal investigations, case work involving bankruptcies and liens, and disaster-relief support. However, taxpayer services — including call centers and most administrative functions not tied to life or property protection — will be suspended.

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The IRS’s Lapse Appropriations Contingency Plan outlined operations for the first five business days of the shutdown and said the agency would continue limited operations using Inflation Reduction Act funding.

The furloughs stem from a funding impasse between President Donald Trump and Congress that has forced a government shutdown with no clear resolution.

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National Treasury Employees Union President Doreen Greenwald said the shutdown has cut off Americans from vital IRS services.

“Expect increased wait times, backlogs and delays implementing tax law changes as the shutdown continues,” she said. “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.

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“For frontline employees, the complete lack of planning left them in the dark about their work status until their supervisor informed them today,” Greenwald added. “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.”

According to The Associated Press, the IRS told employees they would receive back pay once the shutdown ends. The Trump administration warned Tuesday that back pay for furloughed federal employees is not guaranteed.

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Earlier this year, the IRS began a series of workforce reductions that brought total employment down from about 100,000 at the end of 2024 to roughly 75,000 before the shutdown.

The Associated Press contributed to this report.