IRS furlough guide: Info for you and your clients

The news that a significant number of IRS employees have been furloughed due to the ongoing government shutdown has left millions of taxpayers with unanswered questions. If you’re asking what this means for your clients’ refund, the final October filing deadline, the tax filing process, or whom to reach out to for help, you are not alone. Here’s the clarity you need on what this furlough means for your clients’ taxes—and how to navigate it successfully:

Key takeaways:

• File by the deadline: The tax deadline for extension filers of October 15 is still in effect for tax year 2024.
• E-file for speed: The IRS continues to process e-filed returns and issue direct deposit refunds.

What does furlough mean?

A furlough is when employees are placed on temporary, unpaid leave. In the case of the IRS, the furloughs are the result of the recent federal government shutdown causing budgetary constraints. As a result of October 8 announced furloughs, close to half of IRS staff will not report to work, leaving some regular duties, such as answering customer service calls and investigating cases suspended or significantly delayed. While the budgetary shutdown is the broader issue, the furlough directly impacts taxpayers needing customer support as this is expected to cause service gaps and delays.

How does this affect refunds and taxes?

The IRS furloughs affect some critical areas related to taxpayers. Below are answers to some of the most common concerns for your clients:

Do I still need to file my 2024 taxes by the October 15 deadline if I’m on extension?

Yes. The October 15 deadline still applies, and you should file by this date to avoid potential late-filing penalties. The only exception is if you’ve been granted a specific extension due to a recent federally declared disaster.

E-filing is the fastest way to get your return processed, and you’ll receive an electronic confirmation once your return is accepted by the IRS. 

Will my refund be delayed?

According to the IRS, processing for most returns and refunds will continue as usual. If you e-file and choose direct deposit for your refund, the IRS will process your return and issue your payment as they usually do. Filing as soon as possible and opting for direct deposit can help streamline the process.

What happens to paper returns or correspondence?

If you’ve filed your taxes on paper, there may be processing delays. Similarly, letters sent to the IRS or requests requiring physical responses may go unanswered until the shutdown ends.

Are audits and collections paused?

Audits and collections generally slow down during a furlough, as the IRS does not have enough personnel to conduct in-depth reviews or pursue collections actively. However, automated notices may still continue, so it is critical not to ignore any IRS correspondence.

The Intuit® Tax Pro Center will provide continuous tax law and news updates, so check back frequently for the latest information.

Editor’s note: Parts of this article were originally published on the TurboTax blog.