The Internal Revenue Service kicked off a furlough today, essentially shutting down most of its functions and putting roughly 35,000 workers—about half the agency’s staff—on leave. What began as a modest five-day contingency plan has now ballooned into a suspension, creating immediate hurdles for taxpayers and hinting at a hard-line enforcement push once operations resume.
Current State of Affairs: The IRS Has Largely Halted Its Operations
What Still Works:
- Automated systems that handle returns
- Electronic filing acceptance
What’s Shut Down:
- Manually carried out collection steps
- Phone numbers for the customer service desk
- Managing the intricacies of case resolution
Here’s the cruel irony: This shutdown lands a mere week before the October 15 deadline for extended tax returns, leaving thousands of taxpayers scrambling in the dark without any IRS assistance.
This Shutdown Is Different
This shutdown isn’t like the ones we’ve seen before. It rolls in just after the IRS landed an $80 billion boost for modernization courtesy of the Inflation Reduction Act. For the past two years, the agency has been:
- Augmenting the force with thousands of enforcement agents
- Incorporating AI-powered mechanisms to pick audit targets
- Enhancing the way they gather data and the tools used to parse it
- Compiling a queue of cases that zero in on high-income taxpayers
A Storm of Enforcement Is Brewing
Quick-Action Playbook Once the System Restarts
- Compressed Timelines: The IRS will feel a squeeze to catch up, which is likely to translate into swifter audit notices and more cramped timeframes for taxpayers to respond.
- Triage Processing: In practice, the agency will fast-track the cases that bring in revenue, leaving intricate taxpayer situations to languish in delay while enforcement actions race ahead.
- Automated Enforcement: With AI getting an upgrade, the IRS now spots and chases down non-compliance cases at a breakneck pace and on a massive scale.
The $430 Billion Pressure Point
According to the IRS, the nation loses $430 billion each year to the so-called “tax gap”—the gap between taxes owed and the revenue actually collected. With Congress scrutinizing the agency’s sizable funding boost, the IRS is likely to roll out more aggressive tactics to prove it can deliver results:
- A marked rise in audit rates spanning all income strata
- An uptick in the filing of property liens and the seizing of assets
- A restrictive attitude toward negotiating payment plans
What This Means for Different Taxpayer Situations
- If You Have Returns Still Unfiled – The shutdown leaves filing dates intact, yet it wipes out your ability to obtain assistance from the IRS. Every return left unfiled will be snapped up as a focus for aggressive enforcement as soon as the service is back up.
- If You Owe Back Taxes – For now, collection efforts are on hold. But the IRS’s fortified tech-driven system will zero in on and chase these cases with vigor once the shutdown lifts. In the interim, interest and penalties keep stacking up throughout the shutdown.
- If You’re Under Audit – Audit proceedings are frozen, but your deadlines aren’t. Miss a response window during the shutdown, and the IRS won’t show mercy when they return.
- If You Need Assistance from the IRS – Customer service is effectively off the grid. When it eventually returns, brace for backlogs that stretch for months and waiting periods that feel interminable.
- Critical Deadline Alert: Even though the IRS is in a shutdown, folks who filed for an extension on their 2024 returns still have to get them in by October 15. Miss that deadline and penalties and interest will pile up. Those late filings will be among the first the agency zeros in on when it cranks up enforcement after the shutdown.
Historical Precedent: Why Things Are Likely to Get Worse
Previous IRS shutdowns have:
- Compiled a series of processing backlogs that stretched out over an entire year
- Triggered a shift toward aggressive collection maneuvers as the IRS hurried to regain footing
- Left taxpayer service centers swamped for months after reopening
These days, the IRS is equipped with more sophisticated enforcement tools and feels heightened pressure to demonstrate the results of its $80 billion investment.
Safeguarding Yourself: Practical Action Steps
- For Unfiled Taxes: Don’t sit around waiting for the IRS to get in touch. Taking action now—while enforcement is still easing up—opens up alternatives and sharpens your bargaining power.
- For Current Issues: Log every detail. Steel yourself for a compressed timeline once the operation is back in gear. The IRS is unlikely to have the patience—or the bandwidth—to entertain protracted negotiations.
- For Future Planning: Give your tax affairs a quick audit today. In the wake of the shutdown, the IRS is expected to intensify its hunt, tracking down compliance hiccups with renewed vigor.
The Bottom Line
The shutdown isn’t a fleeting inconvenience—it’s the lull before a surge of enforcement. Once the IRS resumes operations, it will be under pressure to prove its performance and will wield newly sharpened tools to chase taxpayers more aggressively than ever before.
Those taxpayers who come out ahead in this climate are the ones who seize the initiative now, settling their tax issues before the enforcement apparatus reaches full speed.
Don’t Wait for the Enforcement Ramp-Up
The next few months are poised to bring an IRS enforcement drive unlike anything seen before. If you’re dealing with unfiled returns, lingering tax debts, or a looming audit, having a seasoned professional on your side isn’t just a convenience—it’s a downright necessity.
Our team of CPAs and Certified Tax Resolution Specialists knows the nuts and bolts of the IRS’s enforcement process and stands ready to help you:
- Deal with any back-tax issues before aggressive collection gets underway
- File missing returns using appropriate penalty-abatement tactics
- Stand in for you during audits and appeals
- Take steps to keep your assets out of the reach of IRS collection measures
Get a no-pressure consultation on your tax situation today.
Call: (213) 600-7388
Unravel IRS troubles with the aid of a CPA/Certified Tax Resolution Specialist whose sole focus is back-tax relief.