By Alyssa Sperrazza
A new year means tax season will be here soon.
At the same time, the federal government remains in a partial shutdown, which creates concerns about tax returns and refunds.
The Internal Revenue Services (IRS) released a Lapsed Appropriations Contingency Plan for the fiscal year 2019. The contingency plan only explained how the IRS will go about the first five business days during the government shutdown.
As the new year is underway with the shutdown still in place, the IRS is now having to rework its plan, unsure of how large an impact the shutdown could have if it continues further into the month.
When the shutdown began December 22, the IRS kept less than 10,000 federal employees working, having to furlough thousands of other employees. This may have to change though as tax filing season approaches, with already several reports of employees having to come in without pay in order to keep operations running.
Ryan Curry, a partner at the Yukon accounting firm Ron Curry CPA, said he doesn’t think the shutdown will have much, if any impact on tax returns as long as the government reopens before the end of the month.
“[The IRS] is not allowing anyone to submit a return until the end of January,” Curry said.
“As of today, January 29 is when they projected tax filing season will begin… The filing deadline is April 15. If there are any effects on filing season, we wouldn’t have any potential danger of it affecting it till the end of the month. To me it’s almost a moot point because we still have four or five weeks till it becomes an issue.”
Taxpayers will still be able to send their tax returns in the mail or submit them online even if the shutdown continues. There could be several problems though if the shutdown extends into February, the most noticeable one being that tax refunds won’t be issued.
The IRS usually takes a couple of weeks to begin sending refunds out, but the limited number of employees will surely slow the process. This will especially delay refunds for anyone who is still waiting on tax returns from 2018.
The IRS listed several functions that will be on hold during the shutdown, including audits, return examinations and non-automated collections. Curry added it may be more difficult to get a telephone call through with the majority of staff furloughed.
Another problem the IRS may face is the continuing implementation of the tax legislation passed by Congress in 2017. The contingency plan mentioned the law’s implementation stating that it “requires creating or revising hundreds of tax products including worksheets and tax forms, form instructions and publications as well as changes to current IRS policies and procedures.”