IRS refund delays could hit millions as government Shutdown threatens 2026 tax season - here's everything you need to know

IRS refund delays 2026: As the 2026 tax filing season gets underway, Americans preparing to submit their returns may face delays as the Internal Revenue Service braces for a possible government shutdown later this week.

Why a Government Shutdown Is Possible This Week

The IRS officially opened tax season on Monday, January 26, but tax return processing, refund issuance, and customer support could be disrupted if Congress fails to reach a funding agreement by the Friday, January 30 deadline. Without a deal or a new continuing resolution, a partial government shutdown would begin Saturday, January 31, as per a report.

Although Congress approved full-year funding last November for several federal agencies, others received only temporary funding through January 30. The Treasury Department, which oversees the IRS, remains among the agencies operating under a continuing resolution and has not yet secured full-year appropriations for fiscal year 2026.


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DHS Budget Dispute Emerges as Key Obstacle in Talks

Funding talks have stalled largely over the Department of Homeland Security. Senate Democrats and Republicans remain divided on increasing DHS funding following the fatal shooting of Minnesota ICU nurse and protester Alex Pretti by an ICE agent. The incident was the second fatal shooting by ICE officers this month, following the death of Renee Good, prompting opposition from some Democratic lawmakers to allocating more than $76 billion for ICE and Border Patrol ahead of the deadline.

If lawmakers fail to pass the remaining appropriations bills, funding would lapse for several major federal departments, including the Treasury Department, Defense Department, State Department, Department of Homeland Security, and the departments overseeing labor, education, health, transportation, and housing.

Why Tax Refunds Could Be Delayed This Filing Season

A shutdown could directly impact the IRS, which is already facing potential funding reductions. A bipartisan agreement released in January 2026 would cut the agency’s budget by about 9%, or roughly $1.1 billion, according to the Bipartisan Policy Center, as per The Sun report.

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What Happened to the IRS During the 2025 Shutdown

During the most recent government shutdown in 2025, the IRS paused many of its operations after its allocated funding ran out. Roughly half of the agency’s workforce was furloughed within the first week, while in-person appointments were canceled and walk-in taxpayer assistance centers were closed. Audits, appeals, applications, and paper processing were paused or slowed, and refunds were delayed.

How a Government Shutdown Could Impact IRS Services

Automated e-filing systems and telephone services continued to operate during the shutdown, and the agency continued collecting tax payments. However, the IRS did not issue refunds while funding was lapsed, although some error-free electronic filings were previously processed automatically.

April 15 Tax Deadline Still Applies Despite Shutdown Risk

Despite the potential disruptions, the April 15 tax filing deadline remains in place even during a potential shutdown.

Ihe IRS said during the last shutdown, “All tax deadlines remain in effect, including those covering individuals, corporations, partnerships and employers,” as quoted by The Sun.

The Treasury Inspector General for Tax Administration warned last October that reduced funding and staffing would make it difficult for the IRS to modernize its systems, assist taxpayers, and enforce tax laws.

Will the IRS Issue Refunds During a Shutdown

While the federal government has experienced numerous shutdowns over the past several decades, a shutdown during tax season has never occurred. With the 2026 filing season now open, a funding lapse could create unprecedented challenges for the tax agency and millions of taxpayers.

FAQs

Is the IRS open for the 2026 tax season?
Yes. The IRS officially opened the 2026 tax season on January 26.

Could my tax refund be delayed this year?
Yes. Refunds could be delayed if a government shutdown occurs.