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Tax Season: What To Expect During Another Government Shutdown

Tax Season: What To Expect During Another Government Shutdown

Tax Season: What To Expect During Another Government Shutdown

Tax Season Shutdown Impact Infographic

The federal government was partially shut down from December 22-January 25 which was the longest shutdown in U.S. history. There were 800,000 government employees who were not getting paid, with 420,000 of them still being required to work. Forty-three percent of IRS workers were among furloughed employees, and almost a quarter of the IRS agents called back into work in January did not show, citing financial hardship.

Because of the staffing shortage and uncertainty around the shutdown, the IRS developed a contingency plan for this tax season. If Congress doesn’t come to a funding agreement, the government will shut down again on February 15. In the case of a second shutdown, this is how things may look.

Tax returns

Breaking from the tradition of past shutdowns, the IRS will be accepting paper and electronic tax returns as normal during the shutdown. However, the IRS encourages taxpayers to file electronically for quicker processing times and refunds.

Tax refunds

Tax refunds will still be issued, but taxpayers are encouraged to use e-file or Free File with direct deposit to avoid delays. Refunds will still be subject to fraud, identity theft, and other IRS reviews.

IRS tools such as the Where’s My Refund? tool and the IRS2go mobile app will still be functional during the shutdown for taxpayers to check on their refund status.

Audits and collections

The IRS won’t be conducting audits during the shutdown, but automated audit selection letters will still be going out. If taxpayers are selected for an audit, they will not be contacted by an auditor until the shutdown ends. Likewise, no collection activity will be conducted other than automated collection activity. There is concern in the tax resolution industry concerning 30, 60, and 90 day letters, in addition to getting responses for stopping automated collection activity.

If you have an audit scheduled, don’t expect the agent to show up during the shutdown. Since the telephone lines will be mostly off, you won’t be able to reschedule with the agent until the shutdown is over.

  • The Tax Court shut down operations on December 28, 2018 and reopened January 28.
  • All trial sessions scheduled through February 11 are canceled.
  • Trial sessions will proceed as scheduled as of February 25.
  • The Tax Court website is the best place to get information about a pending case.

If you sent documents to the Tax Court that were returned, you should resend the documents through the U.S. Postal Service or a designated private delivery service. Please, be sure to include a copy of the original envelope showing the postmark or other proof of mailing. Keep the original envelope.

Note: Criminal investigation work will continue during the shutdown.

IRS resources

Many IRS help resources will be limited during the shutdown—especially live assistance.

  • There will be limited telephone customer service assistance available, so the IRS advises taxpayers to be prepared for longer wait times.
  • There will be no in-person meetings available.
  • All taxpayer assistance centers (TACs) will be closed, and if you already have an appointment scheduled that’s related to audits, collection, Appeals, or Taxpayer Advocate cases, you should consider your appointment canceled.
  • Your appointment will be rescheduled once the IRS reopens.
  • The CAF Unit won’t be operating, so there will be no way to file new Power of Attorney forms.

The resources that will be available are automated applications. As mentioned before, taxpayers can still use the Where’s My Refund? tool and the IRS2go mobile app. The IRS website will still be functional. The EIN online system will also be functional for everyone except foreign taxpayers.

Be prepared and feel free to reach out to us for your income tax needs.

Call (925) 307-5454 for income tax assistance.

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