This story was updated at 3:55 p.m.

The IRS is sending mass furlough notices to employees and shuttering most of its operations, now that a government shutdown has extended beyond its initial contingency plan.

The agency posted on its website Wednesday morning that, “due to the lapse in appropriations, most IRS operations are closed.”

The IRS, in updated contingency plans it posted Wednesday afternoon, plans to keep 53% of its employees working, as the shutdown enters its second week. A majority of them work in public-facing taxpayer services positions.

The IRS, which is preparing for next year’s filing season, kept all its employees on the job for the first five business days of the shutdown. But its initial contingency plans didn’t specify what would happen if a lapse in funding extended beyond Oct. 7.

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According to the agency, an “IRS-wide furlough” began Wednesday morning, “for everyone except already-identified excepted and exempt employees.”

A notice sent to all IRS employees states that furloughed and excepted IRS employees will receive back pay once the shutdown ends.

The Office of Management and Budget on Tuesday floated the possibility that furloughed federal employees would not be guaranteed back pay.

Legislation that President Trump signed in January 2019, which ended a record 35-day government shutdown, guaranteed back pay to these employees once any shutdown ends.

“Although you will be placed in non-pay and non-duty status during the furlough, the Government Employee Fair Treatment Act of 2019 requires employees of the federal government who are furloughed or required to work during a lapse in appropriations to be compensated for the period of the lapse. The employees must be compensated on the earliest date possible after the lapse ends, regardless of scheduled pay dates,” the notice states.

OMB circulated a draft legal opinion on Tuesday stating that furloughed federal employees will no longer be automatically guaranteed back pay. Instead, OMB argued that lawmakers must explicitly approve back pay for furloughed employees in a stopgap spending bill.

OMB’s memo immediately received bipartisan pushback from congressional leaders, and attorneys told Federal News Network that the proposal would likely come under legal scrutiny.

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House Speaker Mike Johnson (R-La.) told reporters on Wednesday that “it’s my understanding that the law is that they would be paid.”

“There is some other legal analysis that’s floating around. I have yet had time to dig into and read that. But it has always been the case — that is, tradition and I think statutory law — that federal employees be paid,” Johnson said.  “And that’s my position. I think they should be. They should not be subjected to harm and financial dire straits.”

Employees will be given up to four hours to close out work requirements — such as updating their out-of-office voicemail and email messages — and receive formal furlough notifications.

Acting Chief Human Capital Officer David Traynor told employees that some staff “are not being furloughed, because they have been excepted or exempt from the furlough based on their specific duties.”

“Unless you have received specific notification that you are excepted or exempt from the furlough, you are being furloughed beginning October 8, 2025,” Traynor wrote.

The last government shutdown ended on Jan. 28, 2019, the first day of that year’s filing season. Despite the record lapse in funding, Chuck Rettig, the IRS commissioner during the first Trump administration, and the filing season was still “highly successful.”

“IRS Filing Season employees are resilient and well know and respect the importance of processing returns and generating refunds and refundable credits to eligible individuals,” Rettig said. “I’m confident in their ability and desire to achieve yet another successful filing season, even with the inherent uncertainties of a lapse in appropriations.”

Doreen Greenwald, national president of the National Treasury Employees Union, said taxpayers should expect increased wait times, backlogs, and delays implementing tax law changes as the shutdown continues.

Taxpayers who requested extensions on their tax returns have until Oct. 15 to file them.

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

An IRS employee in Kansas City told Federal News Network on Tuesday that local management began notifying employees about their furlough status that afternoon. A second IRS employee, however, said frontline managers were asked to contact personnel after tour-of-duty hours to give them an update on the agency’s contingency plans.

The Trump administration has relied more heavily on Inflation Reduction Act funds to keep the IRS open, compared to what the Biden administration proposed in its shutdown plans. The agency received those funds to rebuild its depleted workforce and modernize its legacy IT, after more than a decade of budget cuts.

Faced with a possible lapse in funding in September 2023, the IRS initially planned to remain “fully operational” during a government shutdown, and keep employees on the job using Inflation Reduction Act funds.

But the agency ultimately decided there were limits on how it could use those funds to keep running during a funding lapse. The IRS reversed course, and decided it would have to furlough two-thirds of its staff during a shutdown.

A Treasury spokesperson said at the time that IRS activities that were funded by the Inflation Reduction Act in fiscal 2023, or are excepted under longstanding governmentwide lapses in appropriations procedures, would continue, but that all other operations would pause under a government shutdown.

The IRS is preparing for next year’s filing season and scrambling to prepare for major changes to the tax code as part of the “Big Beautiful Bill” that President Donald Trump signed into law in July. Some of those changes will go into effect as soon as next year’s filing season.

If you would like to contact this reporter about recent changes in the federal government, please email jheckman@federalnewsnetwork.com, or reach out on Signal at jheckman.29

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