IRS Furlough Update: What Employers Need to Know
On October 8, 2025, the Internal Revenue Service (IRS) confirmed the start of an agency-wide furlough. While this type of federal lapse can create uncertainty, HR Wise LLC is committed to keeping our clients informed and prepared. Below is a summary of the IRS Lapse/Contingency Plan and how it may impact payroll, tax processing, and year-end planning.
1. Duration & Scope
The contingency plan currently covers the first five business days beginning October 8, 2025.
If the furlough extends beyond this period, additional processing delays may occur.
More than half of the IRS workforce is expected to continue working under “excepted status,” ensuring that critical functions such as tax processing, systems maintenance, and security operations remain active during the shutdown.
2. How IRS Operations Are Affected
IRS Phone Support:
Phone lines are open but hold times may be longer than usual. We recommend postponing non-urgent calls to the IRS or other federal agencies during this period.
Electronic Federal Tax Payment System (EFTPS):
The EFTPS remains fully operational, so federal tax payments will continue to process normally.
EFTPS Enrollments:
Enrollments are being accepted, but validation and confirmation steps may take longer than usual.
Federal Tax Notices:
Federal tax notices are still being issued, but any that require direct IRS review or response may experience processing delays until normal operations resume.
Amendments:
Federal amendments will continue to be accepted and processed electronically, though IRS review times may be delayed after the furlough ends.
Quarterly & Annual Filings:
These filings are e-filed and are expected to continue without disruption as long as IRS systems remain available.
3. Planning for Year-End
As we approach the close of 2025, HR Wise recommends that clients plan proactively for potential IRS delays.
This includes reviewing upcoming tax filings, W-2 and 1099 preparation, and year-end reports early to ensure compliance and minimize disruption.
Our Accounting and Payroll Teams are actively monitoring the situation to help clients stay ahead of any adjustments required once the furlough period ends.
4. Ongoing Support from HR Wise LLC
Our priority is to help clients navigate these changes smoothly. We will continue to work closely with the IRS and communicate any important updates as they occur.
If you have questions about how this may affect your organization’s filings, payments, or payroll tax notices, please contact your HR Wise service team for assistance.
