Key Takeaways
- Nearly half of IRS employees were furloughed on October 8, 2025, as the government shutdown entered its second week.
- The agency continues to process electronic filings and payments, but most other operations, including audits and taxpayer assistance, are paused.
- Extension filers with October 15 deadlines must still submit returns and payments on time, even though IRS response times are likely to slow.
- Refunds and correspondence may take longer than usual, and the backlog could extend into next tax season if the shutdown continues.
- Our team continues to monitor the situation and ensure client filings, payments, and documentation remain on track.
What’s Happening at the IRS
The federal government shutdown that began on October 1, 2025, is now directly impacting tax administration. After briefly staying open using leftover Inflation Reduction Act funding, the IRS furloughed roughly 34,000 employees, nearly half its staff, on October 8.
While the agency’s core electronic systems remain functional, most people-powered operations are not. That means:
- Electronic filing and direct-deposit payments continue automatically.
- IT support, criminal investigations, and disaster relief activities are still running.
- But audits, collections, paper correspondence, and taxpayer support lines are all suspended until funding resumes.
If your return requires manual review, or if you’re waiting for a notice or refund, you can expect longer wait times.
What This Means for Connecticut Business Owners
For small and mid-sized businesses, particularly those that filed extensions this year, the immediate impact is limited, but patience will be key in the weeks ahead.
Even though the IRS is still accepting e-filed returns and payments, communication with the agency will likely move at a crawl, at best. Confirmations may take longer to arrive, and any follow-up requests or amended returns will sit in unmonitored inboxes until the shutdown ends.
This slowdown could also delay business tax credits, refunds, or compliance correspondence for those expecting updates before year-end. If the shutdown stretches into November, those backlogs could easily spill into 2026’s filing season.
What Remains Unclear
At this stage, even tax professionals are waiting for clarity on:
- When furloughed IRS employees will return to work
- How the agency plans to prioritize the growing backlog once operations resume
- Whether enforcement, audit, or compliance reviews will be compressed later in the year to make up lost time.
The Taxpayer Advocate Service, which typically assists taxpayers facing IRS delays, has also been shuttered, removing a key resource for those caught in the bottleneck.
For Our Clients: What You Can Expect
If you’re a client of our firm, you don’t need to do anything differently right now. Your returns, extensions, and payments continue to be handled electronically, and we’re tracking IRS updates daily to anticipate any changes that might affect you.
Our goal is to make sure your filings remain secure, deadlines are met, and your business stays in compliance, no matter what happens in Washington. We’ll continue to keep you updated if anything changes.
Not Yet a Client?
If you aren’t currently working with us, now may be the time to consider partnering with an accounting firm that can help you plan proactively when unexpected disruptions occur.
While we can’t take on new October 15 filings at this point, our team is available to help small businesses with:
- Future extension filings and payment planning
- Verification of pending electronic submissions
- Monitoring of IRS correspondence and notices once normal operations resume
The Takeaway
Shutdowns like this one highlight how fragile the nation’s tax infrastructure can be, and how important it is to have professional guidance ready when things slow down. For most small business owners, the message is simple: your filings are safe, but your patience may be tested. With our team watching developments closely, you can stay focused on running your business while we handle the rest.