On October 8, the IRS began furloughing staff and closing most IRS operations due to the lapse in appropriations, according to a new posting on the IRS website and a letter to employees from the acting IRS Human Capital Officer. Previously, the Treasury/IRS shutdown plan had stated that normal IRS operations would continue for five business days, until at least October 7, using Inflation Reduction Act of 2022 (“IRA”) funding, and that all 74,299 IRS employees would be retained during this period.  

The IRS-wide furlough applies to everyone except for those employees who had already been identified as excepted and exempt employees. According to the agency’s updated Lapsed Appropriations Contingency Plan, a little over half of IRS employees (39,870 or 53.6% of its employees) have been identified as exempt and thus not subject to the furlough. All other employees will now be furloughed and placed in a non-pay and non-duty status until further notice after they close out work requirements and receive their formal furlough notification. During the furlough period, these employees are not allowed to work and can only log on to any IRS-issued equipment for certain limited purposes.