Around 40,000 employees will remain working, but the majority of operations are closed.

Democrats and Republicans failed to reach an agreement as the shutdown entered its eighth day, with no endgame in sight. 

The Democrats are demanding the restoration of Obamacare premium tax credits that were chopped in Trump's Big Beautiful Bill. The Republicans are refusing, arguing that the inclusion would give free healthcare to more than a million illegal immigrants. 

The IRS's initial contingency plan, which provided for the first five business days of operations, stated that the department would remain open using Democrat Inflation Reduction Act funds.

Doreen Greenwald, president of the National Treasury Employees Union, said in a statement that taxpayers should expect increased wait times, backlogs and delays implementing tax law changes as the shutdown continues.

'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,' she said.

'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.' 

She urged the Trump administration and Congress to 'reach an agreement that reopens government and restores the services that Americans need and deserve.'

The notice to workers states that furloughed workers and those who remain on the job will receive back pay once the shutdown ends.

This is notable since the Republican administration on Tuesday warned of no guaranteed back pay for federal workers affected by a government shutdown.

Last week, Trump said roughly 750,000 federal workers nationwide were expected to be furloughed across agencies, with some potentially fired by his administration.

Representatives from the IRS, the Treasury and the White House did not comment on the furlough plans.

Earlier this year the IRS embarked on mass layoffs, spearheaded by the Department of Government Efficiency, affecting tens of thousands of workers.

At the end of 2024, the agency employed roughly 100,000 workers - and currently that hovers around 75,000.