IRS Workforce Cut in Half During Shutdown — Refunds and Paper Filings Face Major Delays
The ongoing government shutdown has hit the IRS hard. With more than half of its employees furloughed, the agency is running at only 53.6% staffing capacity. For taxpayers, that means long delays, slower processing times, and more frustration — especially for those who rely on paper filings or are waiting on refunds.
Even though the IRS still enforces deadlines and penalties, much of its normal operation has slowed down. Here’s what’s really happening inside the IRS, how it affects you, and what you can do to stay on top of your taxes.
Why the Shutdown Affects the IRS So Deeply
A government shutdown happens when Congress can’t agree on a federal budget. Without funding, many federal agencies are forced to furlough non-essential employees. Unfortunately, the IRS is one of the agencies that gets hit the hardest.
Essential operations like electronic filing, online payments, and automated systems stay active, but most customer-service and processing staff are sent home. That leaves millions of filings and letters piling up every day.
As a result, many IRS offices are only partially open — and most paper-based work has come to a standstill.
IRS Operating at 53.6% Capacity
According to recent reports, the IRS is currently operating with just over half of its normal workforce. The remaining employees are focusing on critical systems:
- Maintaining e-file processing
- Accepting online payments
- Handling security and IT infrastructure
- Managing audit and enforcement systems
That means the rest — including mail processing, refunds, and correspondence — is either delayed or paused until the shutdown ends.
What Tax Services Are Delayed
While some IRS systems are still online, many taxpayer services are affected. Here’s a breakdown:
Paper Filings
Paper returns are being received but not processed until the IRS reopens fully. That means taxpayers who mailed their returns won’t get confirmations or refunds for weeks — or even months.
Refund Processing
If you’re waiting on a paper-filed refund, expect long delays. Electronic refunds are still being issued, but slower than normal due to limited staff.
Customer Support
IRS phone lines are mostly closed. Only automated systems are available, and getting a live representative is nearly impossible during the shutdown.
Mail and Notices
Letters sent to the IRS (like requests for penalty relief or identity verification) will sit unopened until staff return. Likewise, responses to IRS notices will not be reviewed on time.
What’s Still Working
Despite the reduced workforce, a few essential services continue running:
- Electronic filing (e-file) remains active
- Online payment portals on IRS.gov still accept payments
- Automated penalty systems continue to calculate interest and fees
- Criminal investigations and cybersecurity operations remain in place
This means taxpayers can still file, pay, and get penalized — but not necessarily get help or answers.
How This Impacts Taxpayers
The biggest impact is delay. Everything from refunds to response times is slowed down. For many families relying on their tax refund, the shutdown is creating financial stress.
Business owners also feel the pressure. Paper-filed payroll forms, amended returns, or entity applications (like EIN requests by mail) are stuck in the queue.
And since the IRS still enforces penalties and deadlines, taxpayers are expected to stay compliant — even when the agency isn’t fully operational.
What You Can Do During the Shutdown
If you’re waiting for your return or need help with an IRS notice, there are still steps you can take to minimize problems:
1. Use IRS.gov for Everything Possible
Many tools — like “Where’s My Refund?” and payment setup — are still online. Always try digital first.
2. File Electronically
E-filing is the fastest and safest way to submit your return. Paper forms may take months to process once the IRS reopens.
3. Avoid Sending Mail
Mailed forms will just pile up, so wait until after the shutdown if you must send anything by post.
4. Keep Proof of Payment
If you pay taxes or respond to a notice, save electronic receipts and screenshots. These prove you acted on time even if the IRS is delayed.
5. Contact a CPA or Tax Professional
A licensed CPA can guide you through extensions, payment options, and record-keeping while the IRS is limited.
Why Refund Delays Matter
Refunds are a major part of financial planning for many Americans. The average refund in recent years has been around $3,000, and millions rely on that money for bills or savings.
With the IRS short-staffed, these refunds could take several extra weeks to arrive — especially for taxpayers who mailed paper returns or had identity-verification flags.
Tax experts recommend filing electronically as soon as possible to stay ahead of the backlog.
When Will the IRS Return to Full Strength?
No one knows exactly when the government shutdown will end. Once funding is restored, it could take weeks or months for the IRS to clear its backlog.
Even after employees return, they must process millions of pending documents, refunds, and requests. The agency is also expected to face renewed pressure to handle the upcoming tax season on time.
The Bigger Picture
The current IRS slowdown shows how much America’s tax system relies on real people — not just computers. While automation helps with payments and penalties, refunds, audits, and customer service still need human review.
A prolonged shutdown could affect confidence in the tax system, especially for taxpayers who depend on timely refunds and support.
The Bottom Line
The IRS is still working, but only at half strength. With just 53.6% of staff on duty, taxpayers should expect long delays, slower refunds, and minimal phone support.
The best thing you can do is file electronically, use online tools, and keep records of all payments and submissions. Once the shutdown ends, the IRS will resume full operations — but patience will be key as the backlog clears.