UPDATE: How the Government Shutdown Is Affecting Tax Season

The drama surrounding the federal government partial shutdown—now officially the longest of its kind in U.S. history—continues to unfold. While the impact reaches almost every department of the federal government, all eyes are on the IRS at the moment, as the shutdown is extending into the launch of tax season. Let’s recap a few of the recent highlights and discuss how they may affect you as a taxpayer—and what you can do in the meantime.

Tax Refunds to Be Processed During Shutdown

In an attempt to blunt the impact on U.S. taxpayers (and no doubt stem a groundswell of negative public opinion), the White House announced last week that the IRS would process taxpayer refunds as usual despite the shutdown. (Historically, refunds would be held until the government reopened.) While other IRS functions like audits and taxpayer assistance remain on hold, the average taxpayer should theoretically be able to file a return and receive their refund as planned.

IRS Workers Recalled without Pay

In an effort to keep the government’s promise to taxpayers, the IRS is recalling some 46,000 furloughed workers to begin processing returns—about half its normal workforce. However, since the shutdown prevents processing of paychecks, these workers will be forced to work without pay—and the unions who represent these workers are pushing back. The National Treasury Employees Union has filed two lawsuits against the Trump administration challenging its right to force workers to return to work without pay.

What It Means for You

Despite the intentions of the administration to allow tax season to move forward as usual, the government in general (and the IRS in particular) is effectively being asked to work under conditions that are far less than optimal. The chaos resulting from the shutdown has taken its toll on an agency that was already slightly behind schedule, and union officials have expressed concerns that the IRS will still not be able to start the tax filing season on time. In short, taxpayers can hope for the best but should still be prepared for the worst.

What You Can Do in the Meantime

How can taxpayers weather this uncertain tax season? Some quick tips:

  • File taxes as you normally would. Delaying your returns until the government reopens offers no immediate benefit. The government says it will process refunds, so start by taking them at their word.
  • Contact third-party tax professionals with tax questions. The IRS taxpayer assistance lines remain closed for now.
  • Be prepared for delays. Despite the agency’s best intentions, processing returns may still be a logistical nightmare.
  • Avoid making purchases against your refund. The old adage “Don’t count your chickens before they hatch” applies here. Wait until your refund arrives before spending it.

For pressing tax issues, you don’t have to wait until the government reopens to get help. Give The Highland Tax Group a call at 720-398-6088.