IRS furloughs 34,000 employees as government shutdown continues nationwide
Senate Fails Once Again to End Shutdown
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Nearly half of the IRS workforce — nearly 34,000 employees — faces layoffs as the government shutdown enters its second week, with the agency rolling out a contingency plan to maintain key tax enforcement, data security and tax reporting operations despite a lack of funding from Congress.
In a letter to staff Wednesday, the agency said most operations would be closed. The emergency plan, which takes effect Wednesday and runs through April 30, 2026, details how the IRS will operate without new funding from Congress.
As of July 24, 2025, the IRS employed 74,299 people. During the shutdown, only 39,870 – or about 54% – will remain in service, although it is unclear which positions will be retained.
Key operations that will continue to include tax processing to protect government revenue, computer and data protection systems, criminal investigations, cases involving bankruptcies and liens, and disaster relief support. However, taxpayer services – including call centers and most administrative functions not related to the protection of life or property – will be suspended.
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A sign for the Internal Revenue Service in Washington, DC. (Kayla Bartkowski/Getty Images)
The IRS Credit Lapse Contingency Plan outlined operations for the first five business days following the shutdown and indicated that the agency would continue limited operations using Inflation Reduction Act funding.
The layoffs stem from a funding impasse between President Donald Trump and Congress, which forced a government shutdown without a clear solution.
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Nearly half of the IRS workforce – nearly 34,000 employees – are facing layoffs as the government shutdown enters its second week. (Fox News Digital/Emma Woodhead)
National Union of Treasury Employees President Doreen Greenwald said the shutdown had cut Americans off from vital IRS services.
“Expect increased wait times, backlogs and delays in implementing tax law changes as the shutdown continues,” she said. “Taxpayers across the country will now have a much harder time getting the help they need, just as they prepare to file their extension returns, due next week. Every day these employees are locked out is another day of frustration for taxpayers and a growing backlog of work waiting for the shutdown to end.
SEN RICK SCOTT, REP BYRON DONALDS: TRUMP AND BESSENT IRS REFORM: END JOB-KILLING POLICIES
A sign outside the National Gallery of Art informs visitors of its closure due to the government shutdown in Washington, DC (AP Photo/José Luis Magana)
“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 how our government should treat its dedicated, nonpartisan public servants. We urge the administration and Congress to reach an agreement that reopens the government and restores the services 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 from about 100,000 at the end of 2024 to about 75,000 before the shutdown.
The Associated Press contributed to this report.
