Full Breakdown
Potential IRS Disruptions Amid Government Shutdown
1/28/2026, 7:00:42 AM
Looming Government Shutdown and Its Implications
The U.S. government is on the verge of a partial shutdown set to begin at 12:01 a.m. on Saturday, January 27, 2026, primarily due to a contentious funding package that includes allocations for the Department of Homeland Security (DHS). The package, exceeding $1.2 trillion, has passed the House but faces significant opposition in the Senate, particularly from Democrats who are demanding the removal of DHS funding in light of recent federal agent shootings in Minneapolis, including the deaths of U.S. citizens Renee Good and Alex Pretti. Senate Democrats have indicated they will not support the bill unless these provisions are stripped, complicating its passage.
Impact on IRS Operations and Tax Refunds
Should the shutdown occur, the Internal Revenue Service (IRS) is expected to face substantial operational disruptions. During the previous government shutdown in November 2025, the IRS had to furlough half of its nearly 74,000 employees, leading to significant delays in processing tax returns and issuing refunds. While electronic filing and payments continued, in-person assistance and paper processing were largely halted. Tax attorney Adam Brewer noted that the IRS might still process some returns and refunds, but taxpayers should prepare for potential delays, especially for paper-filed returns.
The IRS has begun accepting tax returns for the 2025 tax year as of January 26, 2026, with the filing deadline set for April 15. Approximately 164 million individual returns are anticipated, and many taxpayers expect refunds. However, the IRS has indicated that a government shutdown could delay these refunds, particularly if funding runs out.
Changes to Tax Filing Procedures
In a significant shift, the IRS has mandated that nearly all federal tax payments and refunds be processed electronically, phasing out paper checks. This change, initiated by an executive order from President Donald Trump, aims to improve efficiency and reduce costs. Taxpayers are now required to provide their banking information to receive refunds via direct deposit. Failure to comply may result in delays, as the IRS will not issue paper checks.
Official Statements & Responses
Senate Minority Leader Chuck Schumer and other Democrats have expressed strong opposition to the funding package, with Schumer stating, “Americans are horrified & don’t want their tax dollars funding this brutality.” Meanwhile, President Trump has attributed the impending shutdown to Senate Democrats, suggesting that it is likely to occur.
Criticism & Opposition
Critics of the funding package argue that the inclusion of DHS funding is unacceptable in light of recent events involving federal agents. This has led to a significant divide in Congress, complicating efforts to reach a bipartisan agreement before the shutdown deadline.
What's Next
As the deadline approaches, Congress must act swiftly to avert a shutdown. If the funding package is not passed by Friday night, many federal agencies, including the IRS, will enter a shutdown posture, impacting their ability to operate effectively during the critical tax filing season. Taxpayers are advised to file electronically and ensure their banking information is accurate to mitigate potential delays in receiving refunds.
Verbatim Quotes
- “Americans are horrified & don’t want their tax dollars funding this brutality,” — Chuck Schumer, Senate Minority Leader
- “Whenever possible taxpayers should file electronically, make sure they enter their bank information accurately so they receive their income tax refund (or can submit payment) timely, and hope they don’t have any issues that would require getting an actual IRS employee on the phone,” — Adam Brewer, Tax Attorney
