IRS Furloughs

• Oct 09, 2025 wisecpa

IRS Furloughs Nearly Half Its Staff Amid Government Shutdown — What Small Business Owners Need to Know

At Wise Business Solutions, we keep small business owners informed about the financial and tax changes that could impact operations, payroll, and compliance. With the federal government shutdown now stretching into its ninth day, a major IRS staffing reduction may cause delays that directly affect your business.

According to Forbes reporter Sara Dorn, in her October 8, 2025 article “IRS Furloughs Nearly Half Of Its Staff Amid Government Shutdown,” the Internal Revenue Service has furloughed nearly half of its workforce—about 34,000 of 74,299 employees—after temporary funding to keep operations running expired.

What’s Still Operating

While the IRS isn’t completely closed, it’s operating on a skeleton crew. Key functions that remain active include:

• Preparation for the 2026 tax filing season

• Implementation of President Donald Trump’s new tax cuts, including no taxes on tips

• Income verification services, disaster relief transcripts, and essential payroll functions

• Security and safety operations for IRS buildings

This means tax filing systems and payment processing are still functional—but many taxpayer-facing services have been suspended.

What’s Paused or Delayed

Here’s what small business owners are most likely to notice:

• Customer service phone lines and call centers are down, making it difficult to reach IRS representatives.

• Processing of non-urgent transcripts, legal reviews, and administrative tasks is on hold.

• Planning, research, and training activities have been paused, which may delay future tax law guidance.

If your business has a payment plan, an amended return, or an open IRS case, expect slower response times and possible backlogs.

Expert Warnings

Doreen Greenwald, president of the National Treasury Employees Union, told Politico that taxpayers should “expect increased wait times, backlogs and delays implementing tax law changes as the shutdown continues.” With tax extension deadlines approaching, small businesses could face additional frustration trying to resolve IRS issues or get assistance.

The Bigger Picture

The shutdown continues as the Senate remains at an impasse, having failed six times to approve either party’s funding proposals. Meanwhile, the Trump administration has indicated that furloughed workers might not receive back pay when the government reopens, based on its interpretation of a 2019 law.

What Business Owners Should Do Now

Until full IRS operations resume, we recommend small business owners:

1. File and pay electronically — e-filing systems remain online and are the fastest way to stay compliant.

2. Document all IRS communications — record submission dates and correspondence in case of future delays.

3. Stay in touch with your accountant or tax preparer — professionals often have additional IRS contact resources.

4. Avoid mailing anything critical if possible — physical mail processing may experience significant slowdowns.

Source:
Information in this post is based on reporting by Sara Dorn, Forbes Staff Writer. Read the full original article, “IRS Furloughs Nearly Half Of Its Staff Amid Government Shutdown,” published October 8, 2025, on Forbes.com