IRS Walks Back Memo Guaranteeing Back Pay for Furloughed Employees

The White House ‘will provide further guidance on this issue, you will be updated accordingly,’ the agency says.

A view of the Internal Revenue Service (IRS) building in Washington on April 11, 2025. Reuters/Jonathan Ernst/File Photo

The IRS on Thursday announced it is retracting guidance on back pay for its workers after it furloughed thousands of its employees in the midst of an ongoing government shutdown.

“An earlier memo circulated on furlough guidance incorrectly stated the nature of the Government Employee Fair Treatment Act of 2019 as it relates to compensation for non-pay and non-duty status,” the IRS said in a post on X, referring to a law that President Donald Trump signed in 2019 to mandate retroactive pay for employees who were affected by the 2018–2019 government shutdown.

The White House’s Office of Management and Budget (OMB) “will provide further guidance on this issue, you will be updated accordingly,” the tax revenue agency added in the post. It did not provide more details, such as when the guidance could be released.

In a letter that was sent earlier in the week to a number of its employees, the IRS said that due to the shutdown, it would be forced to furlough them starting Wednesday. That document, which is still available on the IRS’s website, said that employees under furlough are guaranteed back pay under the 2019 law.

“Employees must be compensated on the earliest date possible after the [government funding] lapse ends, regardless of scheduled pay dates,” the letter stated.

The IRS added that it also recognizes “the difficult financial implications of any furlough, no matter how limited its length” and indicated that it “will make every effort to keep you informed as additional information regarding the Agency funding level becomes available.”

The Wednesday IRS memo on back pay came hours after the White House signaled that federal employees who are currently furloughed may not receive back pay under a memo that was written by the OMB’s general counsel and shared with The Epoch Times.

The shutdown went into effect early on Oct. 1 after Congress couldn’t come to an agreement on a stopgap funding resolution. Democrats have argued that any resolution to reopen the government should include an extension of health care benefits, but Republicans have said that those benefits won’t expire until the end of the year and should be handled in a separate measure.

When asked about the prospects of not paying furloughed workers, President Donald Trump suggested that it may be the case.

“I would say it depends on who we’re talking about,” he told reporters at the White House on Tuesday afternoon alongside Canadian Prime Minister Mark Carney, adding, “For the most part, we’re going to take care of our people.”

Trump then added that “there are some people that really don’t deserve to be taken care of, and we'll take care of them in a different way.”

Previously, the White House had warned that the shutdown could lead to thousands of federal workers being permanently laid off rather than just being furloughed. During his comments on Tuesday, Trump said that it’s possible firings could be initiated “in four or five days.”

“It'll be substantial, and a lot of those jobs will never come back,” Trump added. “But you’re going to have a lot closer to a balanced budget, actually.”