November 2025 Legislative Updates

Shutdown Update

Senate Talks Show Glimmers of Progress:As the shutdown enters Week 6, the federal funding lapse is set to become the longest in U.S. history by Tuesday night. Bipartisan discussions among rank-and-file senators are beginning to show movement toward a possible resolution. Trump administration officials have quietly stayed in touch with GOP negotiators despite the White House’s refusal to meet with Democrats until the government reopens.‍

Mounting Pressure Points: The shutdown’s ripple effects are intensifying. SNAP funding lapsed this weekend, cutting off food aid for millions of Americans until a federal judge ordered restoration. Meanwhile, Obamacare subsidies are expiring, and open enrollment began Saturday with premium hikes exceeding 175 percent in New Jersey and more than 100 percent in Colorado.

‍Political Undercurrents: President Trump continues urging Senate Republicans to eliminate the filibuster, a proposal GOP leaders have resisted. Both parties are closely watching Tuesday’s gubernatorial elections in Virginia and New Jersey, along with the New York City mayoral race, for political signals that could influence negotiations. Many expect serious talks to accelerate after Election Day as lawmakers search for an “exit ramp.”

Legislative and Policy Update

This update highlights the most significant legislative and policy developments since September 2025 that could impact IRS operations, staffing, and management responsibilities. Each section concludes with key points managers should know to help stay informed and prepared.1. Government Funding and Ongoing Shutdown Risk. The prolonged government shutdown remains the central operational issue across the federal workforce. Since September, the House and Senate have debated competing proposals to provide limited pay protections and operational flexibility for agencies without full-year appropriations. Bills to guarantee back pay and to allow partial agency funding during lapses have advanced through committee but have not reached final passage. As a result, the IRS continues to function under its contingency plan, prioritizing essential operations and tax administration while deferring noncritical activities. Treasury has instructed divisions to prepare for additional weeks of limited funding and delayed appropriations.‍

‍What Managers Should Know:

• The shutdown is expected to continue through mid-November, with limited prospects for an immediate funding resolution.
• Retroactive pay is likely but not guaranteed until Congress passes a final funding bill.
• Managers are encouraged to maintain accurate records of furlough and excepted work hours, as OPM will require documentation once funding is restored.
• PMA continues to advocate for legislative solutions that prevent future shutdowns and protect the managerial workforce from financial and operational disruption.

2. Implementation of the “One Big, Beautiful Bill” (OBBBA)

‍The broad tax reform package enacted earlier this year continues to drive operational complexity at the IRS. Since September, Treasury and IRS have released additional notices and technical guidance to address issues arising from new reporting requirements, credits, and exclusions under OBBBA. However, many IT system updates and form revisions remain incomplete, placing added pressure on managers to balance implementation timelines with service delivery demands.

‍What Managers Should Know:

• Implementation workloads are expected to remain high through the 2026 filing season, particularly in correspondence, practitioner support, and error-resolution functions.
• IRS leadership is prioritizing cross-divisional coordination between Forms, IT, SB/SE, and Policy teams to streamline guidance and training.
• Managers should anticipate increased public and practitioner scrutiny as taxpayers encounter processing delays and guidance gaps.
• PMA continues to encourage leadership to provide clear interim guidance and ensure adequate staffing support for front-line managers during the transition.

3. Pressure for Faster Guidance and Clearer Communication

‍Since early fall, tax practitioner associations, industry groups, and congressional oversight committees have intensified calls for the IRS to accelerate guidance releases and improve communication clarity. The Senate Finance Committee has advanced measures requiring plain-language taxpayer notices, improved math-error procedures, and expanded pre-publication review for major guidance items.

‍What Managers Should Know:

• Increased hearings and data requests from Congress and professional organizations are expected through the end of the calendar year.
• IRS policy and Legislative Affairs teams are tracking inquiries related to notice modernization and error-resolution transparency.
• Improving the clarity and tone of taxpayer communications remains a strategic priority for the Service and a key point of external accountability.

4. Federal Workforce Policy and Civil Service Protections

‍Congress has re-engaged in debate over the future of the federal workforce amid growing concern about recruitment, retention, and the effects of extended shutdowns. Several bills introduced since September would expand civil service protections, strengthen appeal rights, and modernize benefits—while others would revise pay and telework structures. None have yet reached final markup, but they signal heightened attention to federal employment issues heading into 2026.

‍What Managers Should Know:

• Proposed legislation such as the Federal Workforce Protection Act and Shutdown Fair Pay Act could directly affect pay eligibility, telework authority, and workforce classification during future lapses.
• OPM has issued interim guidance reminding agencies that managers should not implement new workforce actions, such as DRPs or RIFs, without review and explicit approval.
• PMA continues meeting with the IRS Human Capital Office (HCO) to advocate for manager inclusion in policy discussions, particularly concerning telework flexibility, workload expectations, and DRP processes.
• Managers should expect future communications from PMA summarizing which legislative measures advance or stall in Congress as negotiations continue.

5. Operational Impacts Since September:

IRS divisions have reported significant operational strain from the combined effects of the shutdown, the OBBBA implementation, and delayed resource allocations. Key pressure points include delayed form releases, unprocessed correspondence, and a rise in practitioner inquiries regarding new compliance obligations.

What Managers Should Know:

• Opportunity Zone and new reporting rule guidance released in late September has increased both practitioner outreach and taxpayer confusion.
• Contact centers and liaison offices are experiencing higher call volumes; interim FAQs and scripts remain in development.
• Telework policies are under review as the agency seeks to balance continuity of operations with onsite leadership expectations.
• PMA continues to elevate field-level feedback to Treasury and IRS leadership regarding workload distribution, communication gaps, and morale concerns among managers.

6. PMA Legislative and Advocacy Actions:

‍Since September, PMA has undertaken multiple high-impact advocacy initiatives to represent the concerns of IRS managers nationwide:

• Submitted a formal letter to Senator John Thune, outlining PMA’s shutdown solution framework designed to preserve pay continuity, place accountability measures as a part of congress actions or failure to act, and prevent workforce disruption.
• Attended monthly meetings with IRS HCO to ensure managers are included in policy discussions and leadership planning.
• Attended monthly meetings with the Governmental Managers Coalition to keep our finger on the pulse of what is happening across multiple government agencies.
• Continued to support litigation outcomes—including the injunction halting RIFs during the shutdown—that safeguard managerial stability and fairness across the federal workforce.

What Managers Should Know:

• PMA’s legislative engagement ensures that managerial perspectives are represented in discussions surrounding pay, telework, and workforce restructuring.
• Members are encouraged to share field observations and examples of how current conditions affect leadership and team performance.
• Updates on congressional action and IRS workforce policy will continue in PMA’s weekly legislative digest.
• PMA continues to be the voice for IRS managers, advocating for inclusion, stability, and respect for the management community.

In Closing Federal managers continue to navigate one of the most complex operating landscapes in recent memory. The combination of legislative uncertainty, system change, and workforce strain underscores why leadership matters.PMA will continue to advocate on your behalf—to Congress, to Treasury, and to IRS leadership—ensuring that the managers who keep this agency running are heard, respected, and supported.

‍Kelly Reyes‍

‍Executive Director‍

‍Professional Managers Association (PMA)

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‍🏛️ Legislative Snap shot As of November 4, 2025‍

‍📅 Key Dates

• Nov 13 – 15: Senate hearings on Shutdown Fair Pay Act and civil service protections.
• Nov 20: Treasury–IRS internal leadership briefing on OBBBA implementation progress.
• Mid-Dec: Anticipated congressional vote on stopgap funding or omnibus bill.
• Jan 2026: Launch of OPM workforce modernization pilot; additional guidance expected.

Here’s what’s new on the RIF pause affecting IRS employees, as of October 30, 2025:

• TRO in place since Oct. 15: Judge Susan Illston (N.D. Cal.) issued a temporary restraining order halting shutdown-related RIFs and requiring the government to file an accounting of affected agencies and positions.
  
• Oct. 22 modification → IRS pause: After the court modified the TRO on Oct. 22, the IRS formally paused all RIF-related activity and employee correspondence. IRS reiterated the pause publicly and said HCO will update impacted employees as Treasury shares more information.
  
• Oct. 28 development: Unions report the court extended its order barring shutdown-related firings while litigation proceeds; a lengthy filing (Doc. 94) reflects proceedings around a preliminary injunction and expanded defendant list.
  
• Case scope expanded: Plaintiffs added additional agencies and pressed for broader relief; related declarations and motions were filed around Oct. 21–28.
  

What this means for IRS managers (practical takeaways)

• The agency-wide RIF pause remains in effect; do not initiate or continue RIF communications/actions unless and until updated guidance arrives from Treasury/HCO.
  
• Expect further court-driven updates (e.g., briefing schedules or hearings) tied to the preliminary-injunction posture; continue coordination with HR, Labor Relations, and Counsel to ensure compliance.

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