As the 2026 tax season kicks off, the looming threat of a government shutdown raises concerns for millions of taxpayers. The Internal Revenue Service (IRS) officially accepted tax returns starting January 26, but critical functions like application processing and refunds are at risk of significant delays if lawmakers can’t agree on funding by the approaching January 30 deadline.
Recent survey findings from Intuit Turbo Tax reveal that 52% of Americans expect to receive a tax refund this year, with 54% planning to file early to expedite their returns. However, these aspirations may be thwarted if the government does shut down.
The current standoff stems from budget disagreements between Senate Democrats and Republicans regarding funding for the Department of Homeland Security (DHS). This impasse escalated following the tragic death of a Minnesota nurse at the hands of federal immigration agents during a protest, prompting Democrats to reconsider their stance on supporting the funding package.
Senate Minority Leader Chuck Schumer emphasized his party’s refusal to back a budget that heavily invests in ICE and Border Patrol, as negotiations intensify ahead of the January 30 deadline. If a resolution isn’t reached, a partial government shutdown could commence on January 31.
The IRS’s operations during a shutdown hinge on available funding. The agency had to suspend most of its major functions during the October 2025 shutdown, furloughing about half of its workforce and drastically cutting services. Although e-filing was permitted, in-person appointments, walk-in assistance, audits, applications, and paper processing were severely disrupted, leading to delays in refunds.
Importantly, the April 15 tax submission deadline remains unchanged regardless of a potential shutdown. The IRS confirmed that all tax deadlines are still in effect unless specified otherwise. Additionally, tax refunds will be affected, as payments are halted during funding lapses. Automated processing for electronically filed 1040 forms without errors may continue, allowing for some refunds to be deposited directly.
Historically, the government has not shut down during tax season, which means the potential disruption this year could have unprecedented impacts on the IRS’s operations. In previous crises, such as the COVID-19 pandemic, the IRS extended filing deadlines and provided penalty relief for tax returns filed late. Whether similar measures will be introduced in response to this political standoff remains uncertain.
Taxpayers are encouraged to stay informed and monitor IRS.gov for updates on how any government actions may affect their filing processes and timelines during this challenging period.