Crypto Taxes in Chaos as US Government Shutdown Halts IRS

The continued US government shutdown is causing the Internal Revenue Service (IRS) to furlough nearly half its workforce. The agency also communicated that it significantly scaled back most operations.

The IRS staff reductions will likely impact crypto tax services through reduced taxpayer assistance, mounting backlogs for disputes and audits, and delays in issuing new tax guidance.

IRS Sends Staff Home

The IRS announced in a notice today that it will furlough nearly 34,000 employees as part of the ongoing government shutdown. 

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The news comes eight days after Democrats and Republicans failed to agree on legislation to fund the government for the 2026 fiscal year.

According to the notice, the IRS will send home its call center representatives, IT workforce, and most of its headquarters staff. The announcement is expected to affect the agency’s operations significantly.

As a result, crypto tax services will also be affected.

Customer Service Cuts and Backlogs

The IRS furlough is expected to have several consequences on cryptocurrency tax reporting. A sharp reduction in customer service and live support over suspended call center operations will be the most immediate effect. 

Due to the staffing reductions, cryptocurrency users who need to file tax forms will be unable to obtain clarification. Meanwhile, the employee furloughs will exacerbate backlogs and significantly slow responses to ongoing tax disputes or audits related to previous crypto reporting.

Apart from disrupting customer service, the government shutdown risks delaying key operational progress in cryptocurrency tax reporting.

The IRS is actively developing and implementing new information on reporting requirements for digital assets. A prolonged shutdown could consequently postpone the finalization of new guidance material. 

A critical point is that the IRS shutdown does not change tax deadlines or the underlying legal requirements. American taxpayers must still file and pay any taxes owed by the required due dates, including the October 15 extension deadline, to avoid penalties and interest. 

Should the shutdown continue into the following week, crypto taxpayers will face a notably difficult and confusing tax filing environment.