As the shutdown rolls on, taxpayers have been left wondering: What does it mean for tax season? Earlier this month, the Internal Revenue Service (IRS) announced that tax season would open on time (January 28, 2019) and, in a departure from previous years, that tax refunds would be issued during the shutdown. Over the weekend, the IRS announced that Free File, a free online software program available through IRS.gov, was open for business even as IRS doors remain closed. Today, taxpayers finally received more information about what to expect from the IRS during the government shutdown.
The details about IRS plans to operate during the government shutdown can be found in the updated Lapsed Appropriations Contingency Plan posted on the Treasury website. You can read it here.
The plan is 132 pages long. If you’re just looking for the quick and dirty version of what’s happening (and what’s not), 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.
Referring to this time as a “challenging period,” the IRS is reminding taxpayers that the IRS will accept paper and electronic tax returns during the filing season. Filing electronically will speed processing and refunds.
The IRS also confirmed that “refunds will be paid” but cautioned taxpayers that returns would continue to be subject to refund fraud, identity theft and other internal reviews as in prior years.
The IRS website (IRS.gov) remains operational. You can access certain tax refund information using the Where’s My Refund? tool online or on IRS2go, the IRS’ free mobile app (you can learn more about IRS2Go here.)
If you need live assistance, you’re out of luck. Unfortunately, you still can’t call the IRS at this time: no live telephone customer service assistance is available. However, the IRS will be adding staff to answer some of the telephone lines at some point. When the phone lines do open, be prepared to wait. There’s no such luck for in-person tax help: all IRS walk-in taxpayer assistance centers (TACs) are closed.
If you have a scheduled appointment related to an examination/audit, collection, Appeals or Taxpayer Advocate case, you should assume that those meetings are canceled during the length of 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.”
Taxpayers who have submitted applications or requested determinations for tax-exempt status or pension plans will also have to wait. Those will not be processed during the shutdown.
If all of 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.
Tax Court is largely 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).
And finally, as noted before, 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.
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.
I’ll have more, including a review of the contingency plan, available shortly. Continue to check back for additional information.