President Trump follows through on threat and begins cutting federal jobs
President Donald Trump’s administration made good on its threat to lay off thousands of federal employees, with government agencies issuing “retrenchment” notices heading into the weekend.
The U.S. government may be partially shut down with no end in sight, but tax officials never rest.
According to Internal Revenue Service guidelines, taxpayers who filed for an extension by the April 15 tax filing deadline have until Wednesday, Oct. 15 to file without penalty, regardless of whether the shutdown enters its second week.
The IRS acknowledged on Oct. 8 that nearly half of its employees, or more than 34,000 employees, have been furloughed, but some customer service representatives remain on the job due to the agency’s shutdown contingency plan.
“IRS services may be impacted during the government shutdown,” Elizabeth Young, director of tax and ethics at the American Institute of Certified Public Accountants, told CNBC. “However, electronic filing systems generally remain operational, so it is possible to file online.”
Here’s what you need to know about the tax extension deadline and government shutdown.
IRS union warns of delays
The Treasury Employees Union warned in a statement that taxpayers could face “increased waiting times, backlogs and delays.”
“Every day these employees are locked out of work is another day of frustration for taxpayers and a growing backlog of jobs as they sit and wait for the shutdown to end,” the union said.
Jennifer McMillan, president of the National Association of Registered Agents, warned CNBC that customers who require professional customer service will face longer delays.
“It’s going to be a long road,” McMillan said.
How many people have requested an extension?
The IRS reports that it expects about 19.8 million people to file for extensions this year. The agency received more than 20 million extension requests in fiscal year 2024.
Late fees are 0.5% of a taxpayer’s monthly unpaid balance, capped at 25% of unpaid taxes. Penalties for failure to file a return range from 5% to a maximum of 25% of the unpaid tax per month or part of a month. Any extensions will begin on October 15th.
Is there an automatic extension for some taxpayers?
The IRS says some taxpayers will automatically be given additional time to file their tax returns without having to file for an extension.
Military members serving outside the United States and Puerto Rico will have their applications automatically extended for two months. This year, applications must be submitted by June 16th. However, the tax payment deadline is April 15th, and interest will be charged if it is not paid. More information can be found in Publication 3: Military Tax Guide. Those serving in a combat zone must file a tax return and pay any taxes due at least 180 days after leaving the combat zone. U.S. citizens and foreign residents living and working outside the U.S. and Puerto Rico will have an automatic two-month extension to file their tax returns, until June 16th this year. However, the tax deadline is still April 15th, and interest will be charged if you don’t pay. Taxpayers in certain federally declared disaster areas may also receive automatic extensions for both filing and payment. Taxpayers in these areas do not need to submit an extension request. The latest disaster tax relief information is available on IRS.gov.
