What to Expect From the IRS During the Shutdown

The current government shutdown has taxpayers on edge with tax season right around the corner. Earlier this month, the Internal Revenue Service (IRS) announced that tax filing season opens on January 28, 2019 and that tax refunds will be issued during the shutdown.

The details about IRS plans to operate during the government shutdown can be found ion the Treasury website n the updated Lapsed Appropriations Contingency Plan. You can read all 132 pages here.

For a quick snapshot of what’s happening, here you go:

  • Returns will be accepted

  • Refunds will be paid

  • The IRS website will be operational

  • No live person assistance is available by phone or appointment

  • No new audits

The IRS will accept paper and electronic tax returns during the filing season. Filing electronically will speed processing and refunds.

The IRS has confirmed that “refunds will be paid” but taxpayers are cautioned that returns would continue to be subject to refund fraud, identity theft, and other internal reviews (as in prior years).

If you have a scheduled appointment related to an examination/audit, collection, Appeals or Tax Advocate case, you should assume those meetings are canceled during the shutdown. The IRS says that it will reschedule those meetings after the IRS reopens.

The IRS is opening the mail and they are cashing checks (I can attest to the latter on behalf of my clients). However, the IRS will not respond to most paper correspondence during the shutdown. Taxpayers who mail letters or other correspondences to the IRS during the shutdown should expect to wait for a response. Remember, even after the IRS reopens there will be a delay in response due to “a growing correspondence backlog.”

Tax Court is closed. Trial sessions which were scheduled for this week (January 14, 2019) were not affected. However, some trial sessions scheduled during the week of January 28, 2019, have been canceled. A decision regarding trials sessions scheduled for the week of February 4, 2019, will be made on or before January 18, 2019 (more here).

Finally, a significant number of Criminal Investigation (CI) employees will continue to work. CI is expected to operate at close to normal levels which makes sense as the bad guys aren't taking a break.

If this feels overwhelming, there are a few bright spots: The IRS will not be conducting audits, and no collection activity will generally occur except for automated collection activity. However, that doesn’t mean that letters won’t go out. Automated initial contact letters for audits, as well as automated IRS collection notices, will still be issued.

That’s a snapshot of the IRS plan during the shutdown as of today. The takeaways: Be prepared to wait. And, of course, be patient.

Rebekah Roy