No, the IRS is not completely shut down; it resumed normal operations in late November 2025 after a brief lapse in funding, but significant staff reductions and backlogs from recent years, including shutdowns and hiring freezes, continue to impact services, leading to potential processing delays, especially for paper correspondence and non-essential services, though essential functions like electronic filing and payment processing continue.
The IRS has resumed normal operations following the conclusion of the government shutdown, including reopening the agency's Taxpayer Assistance Centers.
The IRS e-file shutdown 2025 will start on December 26 and last until it reopens in January 2026.
IRS Impact
The IRS workforce has now returned to work, but the extended furloughs and permanent reductions over the past year will impact IRS operations for some time. The 35-day shutdown from December 2018 to January 2019 created significant IRS backlogs.
If you don't file your tax return by the October 15 extension deadline, the IRS charges a failure-to-file penalty of 5% per month (up to 25%) on unpaid taxes, plus a failure-to-pay penalty (0.5% per month), and interest on the total amount due, potentially leading to significant costs, though you can request penalty abatement for reasonable cause, and if you're owed a refund, you generally won't face penalties but risk losing your refund if you wait too long (usually over 3 years).
The IRS 3-year rule generally refers to the statute of limitations for claiming a tax refund, which is typically 3 years from when you filed your original return or 2 years from when you paid the tax, whichever is later, for the IRS to process your claim. For an audit, the IRS generally has 3 years from the date your return was filed or due (whichever is later) to assess additional tax, though this can extend to 6 years if you significantly underreport income or omit foreign income.
15 to timely file your return. If Oct. 15 falls on a weekend or legal holiday, you have until midnight the next business day following Oct. 15 to timely file your tax return.
From October 1 to November 12, 2025, the federal government of the United States was shut down as Congress failed to pass appropriations legislation for the 2026 fiscal year.
If Congress doesn't reach a funding deal soon, the IRS will have to decide which functions are “essential” and furlough the rest. That's when taxpayers may begin to experience significant slowdowns.
Generally, the IRS is not paying refunds. However, if you, or your tax preparer, electronically filed your individual income tax return, it is error-free, the return can be automatically processed, and you requested direct deposit, there is a possibility that you will get your refund during the shutdown.
The IRS will shut down on December 26, 2025 for individual and business returns. It will re-open mid to late January.
Generally, the IRS processes 9 out of 10 returns within 21 days. If you have not yet received your return, you may need to review your return and contact the IRS.
The IRS doesn't have a strict maximum time limit for issuing refunds, but generally processes e-filed returns with direct deposit within 21 days, while paper returns take 6 weeks or more, with longer waits for those claiming certain credits (EITC/ACTC) or if errors occur. If the IRS holds your refund for more than 45 days past the tax deadline (or filing date if late), they owe you interest, but significant delays (months) can happen for complex issues or extra reviews, sometimes requiring a mailed notice.
No, the U.S. Federal Government did not pass a single, comprehensive 2025 budget but instead relied on several Continuing Resolutions (CRs), essentially stopgap funding bills, to avoid shutdowns, with the final CR extending funding through the entire Fiscal Year (FY) 2025 (ending September 30, 2025) after the House and Senate passed it in March 2025. This resolved the FY 2025 funding, though specific appropriations details and policy riders were included in these temporary measures rather than a full budget agreement.
During a shutdown: Live assistors on IRS phone lines and at Taxpayer Assistance Centers (TACs) are unavailable. Only automated toll-free telephone applications and online self-help via IRS.gov remain operational.
Due to a lapse in government funding, the federal government entered a shutdown at midnight on September 30, 2025. This means that, starting on October 1, the federal government's operations will be drastically reduced.
The late filing penalty is 5% of the additional taxes owed amount for every month (or fraction thereof) your return is late, up to a maximum of 25%. If you file more than 60 days after the due date, the minimum penalty is $525 (for tax returns required to be filed in 2026) or 100% of your unpaid tax, whichever is less.
Effective September 30, 2025, the IRS discontinued the issuance of paper checks for all tax-related refunds. All payments from the IRS will be made electronically via direct deposit, electronic funds transfer, prepaid debit cards, or other approved digital methods.
The due date to file your California state tax return and pay any balance due is April 15, 2026. However, California grants an automatic extension until October 15, 2026 to file your return, although your payment is still due by April 15, 2026. No application is required for an extension to file.