The Internal Revenue Service furloughed nearly half of its workforce on Wednesday, marking a major development in the ongoing government shutdown that has now stretched into its eighth day—with no clear path to resolution in sight.

Approximately 40,000 IRS employees remain on the job, but that leaves a large portion of the agency’s staff—more than 35,000—at home without pay, waiting for Washington to act. The shutdown has already slowed or halted many government services, and now, the effects are starting to hit taxpayers directly.

For Americans preparing to file tax extension returns, the timing couldn’t be worse.

IRS operations have been significantly scaled back. Phone lines, paperwork processing, and enforcement activities are all impacted. According to Doreen Greenwald, president of the National Treasury Employees Union, taxpayers should expect serious delays in service.

“Taxpayers around the country will now have a much harder time getting the assistance they need, just as they get ready to file their extension returns due next week,” Greenwald said in a statement. “Every day these employees are locked out of work is another day of frustration for taxpayers and a growing backlog of work that sits and waits for the shutdown to end.”

The IRS’s contingency plan had allowed the agency to continue limited operations for the first five business days of the shutdown, funded through money provided in the Inflation Reduction Act. But that funding appears to have run out, forcing the agency to begin widespread furloughs.

The broader shutdown continues to center around a standoff between Democrats and Republicans in Congress—and pressure is growing on both sides.

At the core of the disagreement is a policy dispute over Obamacare premium tax credits. Democrats want them fully restored, after they were cut under Trump’s Big Beautiful Bill. Republicans are holding firm, arguing that restoring the credits would provide free healthcare to more than a million illegal immigrants—something GOP lawmakers say is unacceptable while federal employees are being sent home without pay.

The political stalemate has put hundreds of thousands of federal workers in limbo. Last week, President Trump said as many as 750,000 government employees would be furloughed nationwide, with some at risk of termination if the shutdown drags on.

Making matters more complicated, the Trump administration warned earlier this week that there is no guarantee of back pay for federal workers affected by the shutdown. That warning stands in contrast to a notice sent to IRS employees, which claims that both furloughed and working staff will receive back pay once the shutdown ends. It remains unclear which message will hold true in the end.

BREAKING: The IRS is now furloughing nearly HALF of its workforce due to the Democrats’ government shutdown.

“Most IRS operations are closed.”

So Chuck Schumer damages the Democrat brand nationwide AND the IRS comes to a screeching halt.

MAGA isn’t complaining about this… pic.twitter.com/A619moJPfC

— Eric Daugherty (@EricLDaugh) October 8, 2025

Neither the IRS, the Treasury Department, nor the White House has commented publicly on the agency’s furlough plans.

This comes as the IRS is already facing long-term staffing issues. Earlier this year, the agency carried out mass layoffs, driven by cuts from the Department of Government Efficiency. By the end of 2024, the IRS workforce had dropped from around 100,000 employees to approximately 75,000.

Now, with nearly half of those remaining workers furloughed, and a deepening political divide in Congress, there are growing questions about how long essential government functions—like tax processing and financial enforcement—can continue to operate at all.

As the shutdown enters its second week, the frustration is building. And for many taxpayers, the wait has just begun.