Your Four-Step Action Plan As Gov’t Shutdown Paralyzes IRS

What’s good for the goose is definitely not good for the gander when it comes to the IRS.

Here we are 30+ days into a federal government shutdown with many officials taking extremely long siestas (getting paid, too, by the way).

And as a taxpayer, you might be thinking, “Well, if they’re not working, maybe I get a break on my payments, or can put off returning that document, right?”

Wrong.

The stark reality is that the IRS has made it crystal clear that “all tax deadlines remain in effect,” and penalties and interest keep accruing. So, you’re still on the hook for every dollar you owe … shutdown or no shutdown.

But don’t panic. You can take action today to protect yourself or seek relief options if you know where to look.

Let’s examine what’s happening today, how this shutdown compares to those in the past, and potential long-term impacts to expect. Most importantly, we’ll provide specific steps you can take right now.

Where We Stand: The Second-Longest Shutdown in U.S. History

As of Nov. 3, we’re 33 days into this government shutdown. That makes it the “second-longest shutdown in U.S. history,” just shy of the record 35-day shutdown from 2018 to 2019. So, we could be breaking that record any day now.

About half of the IRS workforce, or roughly 34,000 employees, have already been furloughed. The agency is operating at skeletal levels with most enforcement staff, customer service representatives, Taxpayer Advocate offices, and Appeals’ functions running with minimal personnel.

What is still functioning? Mostly automated systems. The IRS continues to process error-free, e-filed returns. Direct deposit refunds continue to go out. And, of course, electronic payments are being accepted.

Anything requiring a human being, like answering questions or expressing sympathy, is even harder than normal. A shutdown just compounds the challenge.

And here’s the kicker: The IRS was already operating minus 25% of its workforce before the shutdown began. That’s due to budget cuts and early retirement programs. So this is just making an already dire situation worse.

How This Compares to Past Shutdowns

If you’re wondering how bad this could get, let’s look at history.

The 2018-2019 shutdown lasted 35 days and left the IRS with a backlog of more than 5 million tax returns. It took the agency nearly a year to fully recover. Customer service wait times skyrocketed (that’s hard to imagine, right?) and refunds were delayed by weeks. Fortunately for taxpayers, audit cases came to a screeching halt.

Back in 2013, a 16-day shutdown furloughed 90% of IRS employees and created a backlog of about 1.2 million returns. Although shorter in length, the ripple effects lasted for months.

This time around? Experts warn that the shutdown could seriously impact the 2026 filing season if it drags on much longer. Plus, the IRS is falling seriously behind implementing major tax law changes from the One Big Beautiful Bill Act.

What This Means for You

Here’s what you need to understand: Your deadlines did not change. The Oct. 15 extension deadline passed with no relief. If you missed it, you’re already accruing penalties and interest.

Refunds are delayed. If you filed a paper return for a business refund, or your return has any errors that require manual review, expect significant delays.

Hard to get help. With some phone lines down or hours-long wait times, it’ll be tougher than usual to contact the IRS. On top of that, many Taxpayer Advocate Services and Appeals offices are also closed.

Audits are paused — for now. Most enforcement actions are on hold, but don’t get comfortable. Once the shutdown ends, the IRS will come back with a vengeance, working through backlogs and trying to make up for lost time.

Penalties and interest keep accruing. Although the IRS can’t process your paperwork or answer your calls, the clock still ticks on what you owe.

The Long-Term Impact: What Happens Post-Shutdown?

Let’s say Congress gets its act together soon and the government reopens. Are we in the clear?

Not even close.

Based on what happened after the 2018-2019 shutdown, taxpayers can expect: massive backlogs, delayed 2026 filing season, longer wait times for everything, more aggressive enforcement later, and an economic ripple effect.

Bottom line: Even when the shutdown ends, the pain for taxpayers won’t for some time.

Your Four-Step Action Plan: What to Do Now

O.K., enough doom and gloom. Let’s talk about what you can actually do to protect yourself.

1. File and pay on time, no matter what. Even if the IRS is a mess, you need to meet your obligations. If you haven’t filed your 2024 return yet and you filed for an extension, get it done now. E-file if at all possible, and choose direct deposit for refunds to minimize delays.
2. Document everything. Save copies of every return you file, every payment you make, and every piece of correspondence you send. Keep electronic confirmation receipts, payment confirmations, and timestamps. If there’s a dispute later, you’ll need proof.
3. Don’t wait for IRS correspondence. If you’re expecting anything from the IRS, don’t hold your breath. Assume delays and plan accordingly, especially if you’re counting on a refund.
4. Set up payment plans proactively. If you owe money and can’t pay it all at once, set up an installment agreement now through the IRS website. The automated system still works, and getting on a payment plan stops additional penalties from piling up.

Relief Options: Get Those Penalties Waived

Now, here’s the good news: If you missed a deadline or couldn’t comply because of the shutdown, the IRS may waive penalties. Forget about automatic extensions, but many relief programs can help you.

Option 1: First-Time Penalty Abatement (FTA). This is the easiest option if you qualify. You can get failure-to-file, failure-to-pay, and failure-to-deposit penalties completely waived if:

• You have a clean compliance history for the past three years (no penalties).
• You’ve filed all required returns (or extensions).
• You’ve paid or arranged to pay what you owe.

You can request FTA by phone once the IRS reopens, or by mailing a written request. It’s a one-time deal, but it’s straightforward and doesn’t require you to prove hardship.

Option 2: Reasonable Cause Abatement. If you don’t qualify for FTA, you can request penalty relief based on reasonable cause. This requires you to prove that circumstances beyond your control prevented you from meeting your obligations.

The government shutdown can qualify as reasonable cause, especially if you tried to get help from the IRS but couldn’t reach anyone, needed IRS guidance or forms that weren’t available, the shutdown directly prevented you from complying.

To  request this, you’ll need to:

• File Form 843 (Claim for Refund and Request for Abatement) or write a letter.
• Explain specifically how the shutdown prevented you from filing or paying on time.
• Provide documentation (emails, call logs, evidence of your attempts to comply).
• Send it to the IRS service center where you’d file your current year return.

Be specific, be honest, and keep it short and to the point. And if you lose your patience and feel more stressed than ever, by all means, reach out for help.

Consider Professional Help

Let’s be honest: Navigating IRS relief programs is complicated on a good day. During a shutdown, when half the agency is furloughed and backlogs are mounting? It’s a nightmare.

That’s where a company like TaxRise comes in, especially during the most challenging times. In fact, the team there resolved more cases in October than ever before.

The reasons are simple: While some of the IRS’s customer service teams are paused, and in-person centers closed, TaxRise’s access to the IRS teams still actively working is the difference between resolution and frustration.

TaxRise’s experts specialize in tax relief and resolution services. They know how to work the system, how to file penalty abatement requests that actually get approved, and how to negotiate with the IRS on your behalf.

The company has been through shutdowns before. In fact, the TaxRise team helped clients whose cases were delayed during the 2018-2019 shutdown and still managed to save them thousands of dollars in penalties and interest.

What sets TaxRise apart is its use of AI-powered tools to analyze your tax situation and streamline the process. While the IRS uses AI to catch taxpayers who owe money, TaxRise uses AI to help taxpayers fight back and protect their rights.

The nearly decade-old company handles everything from paperwork to correspondence to follow-up. Basically, TaxRise takes care of all the stuff that’s nearly impossible to do right now because of fewer IRS agents answering the phone.

So, you have two choices: Wait until the shutdown ends, the IRS comes back to life, your patience returns, and tackle your tax issue alone. Or, save your time and sanity and ask for help.

But you don’t have to wait for the shutdown to end. You can act right now and join the hundreds of other taxpayers — with the help of TaxRise — who are taking care of business despite the shutdown.

The Bottom Line

The government shutdown is creating real, immediate problems for taxpayers with the IRS barely functioning as a result. Unfortunately, even when the shutdown ends, the backlog and delays will continue for months.

But you’re not powerless by any means. By acting now, you can protect yourself from the worst of it.

And if you’re feeling overwhelmed or already missed a deadline, don’t wait. Get professional help. The longer you wait, the harder it gets and the more you’ll owe.

Stay ahead of this, and you’ll come out of this just fine.