While Congress and the White House try to come to an agreement on border wall funding, the partial shutdown of the federal government continues, with the IRS currently functioning with barely a skeleton crew. The IRS will still receive tax returns, and the White House tells us (for now, anyway) that the IRS will still process taxpayer refunds even if the shutdown lasts. That said, let’s discuss a few other questions taxpayers may have about how the shutdown may affect them tax-wise.
Will the IRS Continue Audits?
No…and yes. During a shutdown, the IRS operates with limited staff (only 12.5 percent of its workforce as of the beginning of the shutdown), so under its contingency plan, all auditing is suspended until the government reopens. That said, if you have been flagged for an audit, don’t expect to be let off the hook. Chances are your audit will move ahead once the IRS is back to full capacity.
I’m Buying a House. Will the Shutdown Cause Delays with My Loan?
Possibly. If your lender asks you for a Form 4506-T from the IRS to verify your income, you may be out of luck until the government reopens. If you work for a larger company, as MarketWatch points out, your lender may accept income verification through your W2 forms, but self-employed people and small business employees may have a more difficult time persuading a lender to move forward.
What If I Have Questions About My Taxes?
One of the biggest headaches of a government shutdown is that IRS call centers are closed, so if you have questions about your taxes you won’t be able to reach them. However, most non-government tax services, your tax attorney or tax accountant will still be able to answer many of your questions in the meantime. If you have pressing tax issues and need help, Highland Tax Group is here to help. Give us a call at 720-398-6088.