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Will the Shutdown Affect Tax Season?

We are currently experiencing the longest shutdown in since the Congressional Budget Office was created. A number of departments and agencies have been shutdown including the IRS.

IRS offices have been closed, and almost ninety percent of its workers were furloughed when the shutdown began last month. The small percentage of employees that have been working are considered necessary to protect government property. There are also IRS employees who continued working in order to implement the Republican tax plan, the Tax Cuts and Jobs Act, which contained its own funding for two fiscal years. However, there is no one that can answer questions for taxpayers, businesses, and accountants wondering how the new tax law might affect them.

The IRS announced that tax season will open on Monday, January 28, 2019. The IRS will begin accepting paper and electronic tax returns that day. According to the updated IRS contingency plan, employees will be brought back to work, without pay, to process refunds. IRS employees can claim financial hardship, however, which could cause further delays.

Tax papers are encouraged to file their taxes electronically since the tax process is largely automated for tax returns filed electronically and refunds delivered by direct deposit, according to USA Today.

Paper returns, and electronic returns that trigger a review could face delays.  With a limited staff, and no one to answer taxpayers’ questions, there are more likely to be errors in the returns filed.

For those worried that they won’t receive their tax return, the White House Office of Management and Budget stated tax refunds will be paid even if the federal shutdown continues on through the tax filing season.1

For tax payers that find they owe taxes, tax payments are still due by April 15, 2019.

Sources:

US Department of the Treasury

Wall Street Journal

LA Times

Forbes

Updated 1-25-2019

Posted in: Uncategorized

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