The Internal Revenue Service (IRS) has historically been one of the most assertive federal agencies in reducing operations during a funding lapse, and it is expected that their shutdown contingency plan will reflect this trend. The IRS Chief Counsel, who is responsible for interpreting tax law, has consistently held the belief that government workers should only remain on duty during shutdowns if their tasks protect the government rather than individuals. This means that ordinary taxpayers may face greater financial hardship during a shutdown.
During the previous 35-day government shutdown in late 2018 and early 2019, the Taxpayer Advocate Service, which acts as the agency’s internal consumer rights watchdog, was only able to open mail in search of checks payable to the government. They were unable to conduct case work or assist with taxpayer disputes, which are essential aspects of their functions. Additionally, at the beginning of the shutdown, the 12% of IRS employees who continued to work were unable to answer taxpayer phone calls, issue tax refunds, release liens and levies, or provide other taxpayer services.
As the shutdown extended closer to the tax filing season, the IRS gradually exempted more employees and allowed thousands of staff members to return to work. This decision aimed to address the increasing demand for services such as answering phones and issuing refunds, which are critical during the filing season that typically begins in January each year.
In summary, the IRS has historically minimized operations during government shutdowns, potentially leaving ordinary taxpayers vulnerable to financial hardships. The Taxpayer Advocate Service, responsible for protecting consumer rights, was limited in its capabilities during the previous shutdown, only being able to handle checks payable to the government. Other taxpayer services, including answering calls and issuing refunds, were halted initially. As the shutdown further impacted the tax filing season, the IRS gradually brought back additional employees to meet the growing demand for services.