As the partial government shutdown enters its early phase, the IRS is using IRA-backed contingency funding to keep refunds moving while DHS enforcement remains funded separately, setting up a mismatch in how tax and immigration services operate during the disruption. For taxpayers and immigrants in the United States, that split funding matters right now. It can shape how quickly a return is processed, how hard it is to reach a live agent, and whether immigration-related requirements keep advancing even when parts of the government pause.
Section 1: Current IRS operating status under contingency plan during shutdown
Washington, D.C. treats a shutdown as a funding problem, not a total stop. When annual funding lapses, agencies follow a “lapsed appropriations” playbook. For the Internal Revenue Service (IRS), that playbook is the IRS contingency plan. It sets which work can continue, which work pauses, and which workers are called back.
A contingency plan differs from fully funded operations in one main way. The agency may keep core tasks running, but staffing flexibility and support functions can tighten quickly. Think of it like a store that can keep the registers open, but may reduce customer service desks and back-office processing.
Refund processing is the center of attention in early filing season. During a shutdown, the IRS can often keep automated pipelines running, including electronic intake and many return-processing steps. Phone lines and correspondence functions may also continue at first, though wait times can rise if staffing rules change.
Slower areas tend to be “downstream” work that needs more hands, including some audits and collections activities. A key reason the IRS can keep operating this time is alternative funding. The Inflation Reduction Act (IRA) provided multi-year funding that the agency can draw on for certain salaries and operations. That kind of funding can act like a short bridge when annual appropriations lapse.
Section 2: Key policy details and official statements
February 2, 2026 sits inside the IRS’s promised bridge period. The agency has said it can continue “normal operations” and refund processing for at least five business days under its lapsed-appropriations contingency plan. Operationally, that means electronic returns can keep moving through the system, and many refund payments may still be released on routine schedules.
“Five business days” is not the same as “no impact.” It signals that the IRS expects enough available funding to avoid an immediate stop. After that, the agency’s posture can change fast. Managers may tighten overtime, reassign staff, and slow nonessential work.
Scott Bessent also set expectations publicly for the season’s results. In remarks dated January 30, 2026, he spoke optimistically about refunds and take-home pay. Readers should treat that kind of statement as directional, not a guarantee for any specific taxpayer. A return can still be delayed by accuracy issues, identity checks, or missing documentation.
Section 3: Partial shutdown context and funding distinctions
January 30, 2026 is the key trigger point. The partial shutdown began at 11:59 PM on January 30, 2026, when funding lapsed. A “partial shutdown” means some agencies or functions keep working while others pause. The dividing line often depends on whether funding is current, multi-year, or mandatory.
Appropriated funding is the yearly money Congress must renew. When it lapses, agencies can only keep certain activities running under shutdown rules, or through separate funding streams already on the books. Multi-year or mandatory funding is different: it can continue to be spent even if annual appropriations are stalled.
Public Law 119-21 (OBBBA) is central to the immigration side of the story. It provided approximately $165 billion in mandatory funding for DHS and ICE, available through 2029, which creates DHS funding insulation for key enforcement and operational functions. So while the IRS is relying on an IRS contingency plan plus IRA funds, immigration enforcement operations can remain steadier under a different legal funding track.
The practical contrasts across agencies matter to users. The IRS may keep refund processing moving early, but could later face customer-service strain. DHS enforcement activity, by contrast, is less exposed to the same short-term funding cliff. Below are agency-specific operational descriptions to provide the same facts summarized in tabular form.
Internal Revenue Service (IRS). Funding during a lapse is governed by lapsed appropriations rules plus IRA multi-year funds. The IRS can continue “normal operations” initially; refund processing continues for at least five business days, though later service levels may tighten if the shutdown persists.
Department of Homeland Security (DHS). With mandatory funding from Public Law 119-21 (OBBBA), DHS is largely insulated and can support continued operations even during a partial shutdown.
Immigration and Customs Enforcement (ICE). ICE similarly benefits from OBBBA mandatory funding, which helps keep enforcement and related activity operating on a separate funding track through 2029.
USCIS. USCIS operates under a DHS-linked funding mix (fees plus the agency funding context). It can continue processing but timelines can shift because of policy changes, staffing, or downstream dependencies that affect processing speed.
Section 4: Tax season impact and refund timing
Late January filing season timing makes the shutdown feel more personal. Many taxpayers file early, expecting the 21-day standard refund window. In many cases, that clock still holds if the return is accurate, filed electronically, and free of identity or fraud flags.
Refund timing has stages. First comes intake, which is often highly automated for e-filed returns. Next comes validation and any needed checks, including identity verification, credit verification, and mismatch resolution. The last stage is payment release.
A short shutdown may barely touch stage one, but can strain stages two and three if staffing drops. February 4, 2026 has been treated as a practical “watch date” for a deal. If the shutdown resolves quickly, many filers may never notice a difference beyond longer phone waits.
February 6, 2026 matters for another reason: it sits just beyond the initial five-business-day bridge that the IRS described. If the shutdown stretches past that point, pressure points usually appear in phone support, paper-return processing, and correspondence backlogs.
Paper returns are especially sensitive. They typically require manual handling at multiple steps, and those steps can bottleneck. Identity verification queues can also swell if fewer trained staff are available to resolve cases.
Note that the five-business-day continuation is contingent on funding stability; if the shutdown extends, expect possible delays in phone support, paper-return processing, and identity verification backlogs
Taxpayers should prepare accurate returns and limit use of paper-file channels to reduce delays if the shutdown persists beyond the initial bridge
Section 5: Impacted groups and evolving requirements
Different groups feel different parts of the split. Taxpayers expecting straightforward refunds may be fine during a short shutdown. Filers claiming credits that trigger extra verification, or those with identity theft concerns, may face longer waits if staffing tightens after the bridge period. Some amended returns and correspondence-driven issues are also more exposed to delays.
Immigrants and dual citizens face a different kind of continuity. A DHS online portal registration mandate for dual citizens took effect just before this week. Even during a partial shutdown, requirements like account-based registration can keep moving because DHS operations are insulated under Public Law 119-21 (OBBBA).
Practically, that means planning time for account setup, identity steps, and recordkeeping. Keep personal-data sharing tight. Use official sites and avoid sending documents through informal channels.
H-1B planning adds another layer. USCIS has said a weighted H-1B selection process remains on track for February 27, 2026. “Weighted selection” means the system does not treat all registrations the same: at a high level, it prioritizes higher-paid and higher-skilled workers.
Employers and beneficiaries can respond by aligning job offers, wage levels, and role descriptions early, and by preparing registration information before the window opens. Those steps can reduce downstream delays if processing continues on schedule.
Section 6: Context and significance of funding structure
Segmented funding creates mixed signals for the public. IRA funding can blunt disruption at the IRS, especially for refund processing at the start of a shutdown. Yet that does not mean every IRS function stays equally staffed. Customer service and back-office work can still get strained first, because those areas rely on steady staffing and time-consuming manual steps.
DHS funding insulation produces a different outcome. ICE and related functions can keep operating even while other agencies face lapsed appropriations constraints. For immigrants, that can mean enforcement and compliance activity continues, while some benefits-related timelines may still fluctuate due to workload and internal prioritization.
Short-term continuity statements should be read as time-limited. They describe what agencies can do now, not what they can sustain indefinitely. If the shutdown extends, backlogs are the main risk. Backlogs can outlast the shutdown itself.
Section 7: Official sources and references
IRS updates are best checked in two places. Start with the IRS Newsroom, then look for shutdown-related notices and operational announcements. Treasury context can also appear at the U.S. Department of the Treasury website.
USCIS posts process changes, operational alerts, and program announcements in its Newsroom at the USCIS Newsroom. Account-based actions and some case tools are also available through myUSCIS and (https://egov.uscis.gov).
For the text and reference record for Public Law 119-21 (OBBBA), use the official congressional record page already linked in many DHS and Treasury reference materials, then confirm how its mandatory funding applies to DHS and ICE operations.
For planning purposes, two dates deserve extra attention: February 4, 2026 for potential funding movement, and February 6, 2026 as the point where the IRS’s five business days bridge may be tested. File accurately and early if you can, because errors are the one delay you can fully control.
This article discusses ongoing government operations during a shutdown. Information can change. Consult official sources for updates. Tax-related implications are subject to evolving IRS guidance and state rules. Immigration processing timelines can be affected by funding and policy changes; readers should verify current DHS/USCIS announcements.
