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That feels like an odd statement. But gosh, it’s been an odd year.

Earlier this year, the United States Tax Court announced that it would be following recommended guidelines provided by the Centers for Disease Control and Prevention with respect to the COVID-19 Virus.

As the virus spring, the Tax Court continued to limit service and availability to keep taxpayers and employees safe, including holding mail while the Tax Court building is closed.

Now, things are changing again: effective July 10, 2020, the United States Tax Court will resume receiving
mail. Any items currently being held by the United States Postal Service or any private delivery service (such as FedEx, UPS, and DHL) will be delivered to the Court on that day.

That doesn’t mean that the Tax Court is opening. The building remains closed to the public, and until further notice, documents may not be hand-delivered.

Despite mail deliveries, copy requests by non-parties will continue to be fulfilled electronically by email. The Records Department can be reached at (202) 521-4688.

You can find updates on the Court’s website. If you have any questions, contact the Public Affairs Office at (202) 521-
3355.

The impact of COVID-19 is still being felt around the country. As of today, Johns Hopkins is reporting 1,820,523 cases of COVID-19 in the United States, with over 105,644 deaths.

In March of 2020, the U.S. Tax Court began taking measures to limit potential exposure to the virus inside courtrooms. Months later, the Court advises that “the pandemic continues to present public health risks and challenges, particularly where multiple individuals come together in a courtroom.”

Currently, the United States Tax Court building remains closed to visitors, and all trial sessions through June 30, 2020, are canceled.

But that doesn’t mean that matters aren’t proceeding. The Court has advised that “until further notice, Court proceedings will be conducted remotely.” The details for the procedures for operating remotely were adopted on May 29, 2020. You can read the details, and see sample orders and notices in Administrative Order No. 2020-02 (downloads as a PDF) and on the Court’s website under “Forms.”

That means that the Notice Setting Case For Trial now resembles a Zoom invite:

Information on how to use Zoomgov (yes, really) can be found on the Court’s website. A personal Zoom account is not required, and there is no cost to use the system.

Don’t fret: you can still find out what’s happening with the Court: public access to the Court’s remote proceedings will be made available via realtime audio with dial-in information for each session posted on the Court website.

And yes, deadlines still matter, but they’ve been modified a bit. On April 9, 2020, the Internal Revenue Service (IRS) issued guidance in the form of Notice 2020-23 (downloads as a PDF) that extended the deadline to file a Tax Court petition and a notice of appeal from a Tax Court decision. If the deadline for filing a petition or notice of appeal previously fell on or after April 1, 2020, and before July 15, 2020, the filing deadline is now extended to July 15, 2020.

I know that many of you are used to filing by mail. You can file electronically (it’s easy, trust me). However, if you still want to submit documents by mail, you should be aware that mail sent through the United States Postal Service is being held while the Tax Court building is closed. It’s possible, however, that items sent through the United States Postal Service or a designated delivery service (such as FedEx or UPS) may be returned as undeliverable. If that happens, resend the document to the Court as soon as possible after the Court announces it has resumed receiving mail. Hold onto that original mailing: you’ll want to include a copy of the original envelope or container in which it was first sent with your resubmission.

The U.S. Tax Court is headquartered in Washington, D.C. The Court conducts trial sessions in 74 cities across the country and hears disputes between taxpayers (petitioners) and the IRS (respondent). The Court is independent of is not affiliated with the IRS.

When the stimulus check details were announced, I noticed a sharp uptick in questions about Social Security retirement, Social Security Disability (SSDI) and Supplemental Security Income (SSI) benefits. Mainly, folks wondered, “What’s the difference?”

Here’s a quick breakdown.

What are Social Security retirement benefits?

Wages and self-employment income are subject to Social Security and Medicare taxes. Together, Social Security and Medicare taxes are known as FICA (Federal Insurance Contributions Act) taxes and are taken right out of your paycheck. Taxes on self-employment income are separately referred to as SECA (Self-Employment Contributions Act) taxes since self-employed persons pay both the employee and employer contributions.

If you’re employed, you pay Social Security tax (6.2%) as the employee, and your employer also pays the same rate of tax (6.2%); again, if you’re self-employed, you pay both portions.

Unlike Medicare, Social Security taxes are subject to a wage cap. In other words, you pay Social Security taxes on your earnings until you hit a magic number. After that, your wages are no longer subject to Social Security taxes. For 2020 that magic number is $137,700. That means that whether you made $1,000 or $100,000, you will pay Social Security taxes on that income. But if you earn $137,701? You’ll pay Social Security taxes on $137,700, but not on the extra dollar. And if you earn $1,137,700? You’ll pay Social Security taxes on $137,700 but not on the extra million.

Your employer collects those Social Security payments and remits them to the government on your behalf (or you pay them directly if you’re self-employed). These taxes are sometimes referred to as “trust fund” taxes and are credited towards your retirement benefits.

The number of credits you need to get retirement benefits depends on when you were born: If you were born in or after 1929, you need 40 credits, or 10 years of work, to collect retirement benefits. The amount of your benefits depends on how much you earned during your lifetime. Remember, while you’re working, you are paying a percentage of your earnings in Social Security taxes, which means that more money (and thus, more tax) should mean more benefits. If you are out of work for some time or earn less money, your benefits should be lower.

It’s also one of the reasons you should be careful about receiving pay under the table: those funds (unless you report them) won’t count towards your credits.

The age at which you decide to retire also affects your benefit. If you retire at age 62, the earliest possible Social Security retirement age, your benefit will be lower than if you wait. But if you were born in 1953 or earlier, you’re eligible for your full Social Security benefit now. The full retirement age is 66 if you were born from 1943 to 1954 and increases gradually if you were born from 1955 to 1960 until it reaches 67. For anyone born 1960 or later, full retirement benefits are payable at age 67.

Other family members may be entitled to benefits, including spouses who never worked or have low earnings. If you’re eligible for both your own retirement benefits and spousal benefits, Social Security will pay your own benefits first. If your spousal benefits are higher than your own retirement benefit, you’ll get a combination of benefits equaling the higher spouse benefits.

Overall, benefits typically work out to about 40% of preretirement income. As of last quarter, the average monthly check for retired workers, excluding spouses and dependents, totaled $1,463.19 (or $17,558.28 per year).

Once you reach retirement age, you may have to pay income tax on your benefits depending on your filing status and how much other income you receive. For more on whether your Social Security benefits are taxable, click here.

What are SSDI benefits?

SSDI is the abbreviation for Social Security Disability Insurance. Social Security pays benefits to people who can’t work because they have a medical condition that’s expected to last at least one year or result in death. Yes, that sounds ominous, but that’s the definition of disability under federal law.

SSDI is available for workers that, like Social Security retirement beneficiaries, have earned a sufficient number of credits. To qualify, you normally must meet two different earnings tests:

  1. A recent work test, based on your age at the time you became disabled; and 
  2. A duration of work test to show that you worked long enough under Social Security. 

(Certain blind workers have to meet only the duration of work test.)

The tests are based on your age at the time of your disability. But, generally, you can take the year you became disabled and subtract the year you attained age 22, to get the number of quarters of coverage necessary to meet the duration requirement.

Here’s a quick example: Let’s say you were born in 1970, and you became disabled in 2020. The math is 2020-(1970+22) = 28 quarters (or seven years).

When you apply, Social Security will forward your information to a state agency to make the initial disability determination decision. Your doctors don’t decide if you’re disabled. The state agency staff will review your information and may ask you to go for another examination.

  • If your application is approved, you’ll get a letter showing the amount of your benefit, and when your payments start. 
  • If your application isn’t approved, the letter will explain why and tell you how to appeal the determination if you don’t agree.

If you are getting other benefits, like worker’s compensation, the total amount of SSDI available to you may be affected.

Like Social Security retirement benefits, SSDI benefits are typically not taxable. However, if you receive SSDI and another source of income, your benefits may be taxed.

What Are SSI benefits?

SSI is the abbreviation for Supplemental Security Income. SSI gives monthly cash assistance to people with limited income and resources who are age 65 or older, blind or disabled. Children with disabilities can get SSI, too.

To qualify, you must meet the income and resources tests:

  • Typically, your countable income must not exceed the federal benefit rate (FBR). The FBR for 2020 is $783 per month for individuals and $1,175 for couples. If you make more, you may be eligible for a decreased benefit. Generally, the more countable income you have, the less your SSI benefit will be.
  • Your resources (like real estate, bank accounts, cash, stocks, and bonds) must be $2,000 or less ($3,000 for a couple). Your resources do not usually include the home and land where you live; life insurance policies with a face value of $1,500 or less; your car; burial plots for you and members of your immediate family; and up to $1,500 in burial funds for you and up to $1,500 in burial funds for your spouse.

Some states add a supplement, making payments and allowable income levels higher. States that do not have a supplement include Arizona, Mississippi, North Dakota, and West Virginia.

If you get SSI, you may also be able to get help from your state or county, including Medicaid, food, or other social services (call your local social services department or public welfare office for information). Additionally, if you get SSI, you may qualify to get help to buy food through the Supplemental Nutrition Assistance Program (SNAP). If everyone in your home is applying for or getting SSI, you can apply for SNAP through your Social Security office.

For federal purposes, SSI benefits are not taxable.


This meant to be a quick primer, but as you might imagine, the specifics are important (it’s a government program and they like rules). For more on Social Security retirement, SSDI and SSI benefits, contact the Social Security Administration (https://www.ssa.gov/agency/contact/).

And one more thing: YES, all of these folks (those receiving retirement, SSDI, and SSI benefits) are entitled to a stimulus check so long as they meet the other criteria.

The Internal Revenue Service (IRS) will be back to work processing tax returns and issuing tax refunds following an announcement that the government shutdown has ended. But the news hardly means that tax season will be normal: The IRS has indicated that it will take quite some time to recover.

The IRS has told lawmakers that workers will return to “millions of unanswered taxpayer letters” just as tax season opens on January 28. The 35-day shutdown means that the agency is weeks behind schedule on training and new hires for tax season—and that doesn’t take into account recovering from the backlog. According to the Washington Post, the National Taxpayer Advocate advised House officials that it will take “at least a year” for the IRS to return to normal operations. The IRS hasn’t confirmed that statement; House aides who conveyed the conversation were not identified since they are not authorized to speak publicly about the specifics.

After the revelation, taxpayers across the internet quickly disputed the timeframe, arguing that a 35-day shutdown should resolve in about the same period of time. But that doesn’t make sense. Here’s why.

The IRS reportedly has a backlog of 5 million unanswered pieces of mail. At the height of the shutdown, the IRS was receiving more than 700,000 pieces of mail per day—nearly three times what it was receiving ten days prior. Why the increase? As the shutdown dragged on, in-person taxpayer assistance centers, fax lines, and phone systems were closed. That meant that taxpayers and tax professionals were forced to send all requests—even routine requests—by U.S. Mail. I can confirm this to be true: All IRS requests made from our office during the shutdown were made by mail, sometimes to multiples offices for one matter.

So, let’s assume that the 200,000 pieces of mail received before January 16 represents a “normal” day during tax season. Let’s further assume that the number of requests received by IRS drops back to that number now that the shutdown is over (remember, it’s still tax season). Assuming no other work to be done, that would mean that IRS workers returning to the office would break even.

But what about the backlog? If IRS hired additional staff to answer mail at a rate equal to the work being done before the shutdown, it would take 25 days just to clear the backlog of mail.

You and I both know that Congress isn’t going to increase the IRS budget at all, much less give the agency enough funding to double its staff. So let’s assume instead that the IRS reassigns some workers and others boost their productivity so that they are 10% more efficient than before. If the agency can process 20,000 more letters per day, they can wipe out that backlog in 250 business days—roughly, a full calendar year.

You see the problem, right? And of course, you know that the IRS does more than answer mail. The IRS had already confirmed that if you had a scheduled appointment related to an examination/audit, collection, Appeals or Taxpayer Advocate case, those meetings would be canceled during the shutdown and rescheduled after the IRS opened its doors again. Taxpayers who submitted applications or requested determinations for tax-exempt status or pension plans were also forced to wait; those were not processed during the shutdown.

Additionally, the IRS did not conduct any new audits or pursue nonautomated collection activity during the shutdown. And many U.S. Tax Court cases and conferences were canceled (more on those here). Everything that was put on hold has to be tackled on top of the normal workload and wait times were already expected to be long during tax season.

The IRS also has to contend with the Tax Cuts and Jobs Act (TCJA). While money had been appropriated for the TCJA separately from the IRS for some projects (like sorting out those crazy 199A Regs), the government shutdown delayed training IRS employees about the changes. And shortly before the shutdown, the IRS introduced a new form 1040 (see it here) with at least six additional schedules. If my social media feed and email inbox are any indications, taxpayers are going to have questions for IRS employees about how the changes apply to them.

Those changes could lead to a slew of new phone calls about the timeliness and size of taxpayer refunds. Watchdogs have previously warned taxpayers that they could owe more in taxes, with smaller tax refunds to pocket and bigger checks to write. Of course, concerns about tax fraud and identity theft have already slowed down tax refunds; those claiming the EITC or ACTC can’t get paid until mid-February. With so much happening—and no one at IRS to answer the phones—taxpayers have been waiting to ask their questions.

And while the IRS advised that its website would continue to operate normally during the shutdown, taxpayers and tax professionals alike noticed lags, errors and nonfunctioning pages during the shutdown. The IRS information technology systems have long been a concern, with former IRS Commissioner John Koskinen reporting during his tenure that some of the systems dated back to the Kennedy administration. Last year, on Tax Day last, the IRS online systems crashed, sending taxpayers into a panic (fortunately, they were allowed an extra day to file). It may not get better this year: The IRS reportedly lost 25 tech staffers per week during the shutdown.

So what does this all mean for taxpayers and tax professionals? Delays. So be patient. The hope is that things will get back to as normal as possible, but there are bound to be challenges along the way. One of the most concerning? What to prioritize. It’s not a certainty that the IRS will stay open through tax season: While Congress passed a bill, signed by the President, to end the shutdown, funding for the government has only been guaranteed for three weeks.

The Internal Revenue Service (IRS) has issued an update about what taxpayers and tax professionals need to know about cases that might be pending in the United States Tax Court.

As I reported earlier, the United States Tax Court shut down its operations as of Friday, December 28, 2018, at 11:59 p.m. and announced that it would remain closed until further notice. The closures are due to the partial government shutdown.

Initially, the Tax Court announced on its website that trial sessions scheduled for the weeks of January 7 and 14, 2019, would proceed as scheduled and further sessions would be reviewed. The Court updated its site in mid-January, noting that trial sessions scheduled in some cities for the week of January 28, 2019, would be canceled.

Now, the Court has indicated the trial sessions scheduled in the following cities for the week of February 4, 2019, are canceled:

  • Hartford, Connecticut – Judge Kathleen Kerrigan
  • Houston, Texas – Judge David Gustafson
  • San Francisco, California – Judge Albert G. Lauber
  • Seattle, Washington – Judge L. Paige Marvel
  • St. Paul, Minnesota – Special Trial Judge Daniel A. Guy, Jr.
  • Washington, District of Columbia – Judge Robert P. Ruwe
  • Winston-Salem, North Carolina – Judge Joseph W. Nega

Additionally, the trial sessions scheduled in the following cities for the week of February 11, 2019, are canceled:

  • Detroit, Michigan – Judge Ronald L. Buch
  • Los Angeles, California – Judge Joseph Robert Goeke
  • New York, New York – Judge James S. Halpern
  • San Diego, California – Judge Michael B. Thornton
  • Mobile, Alabama – Judge Mary Ann Cohen

If your case has been canceled, you will be informed about your new trial date.

If your case is scheduled for a future date, not on the list, hold tight: a decision regarding February 25, 2019, trial sessions will be made on or before February 7, 2019. However, taxpayers with cases that have not been canceled or that have not yet been scheduled for trial should expect their cases to proceed until further notice.

If your case was canceled, you may still have a chance to clear up the matter. The IRS has indicated that, after the IRS and Chief Counsel reopen, they will make “best efforts to expeditiously resolve cases.”

During the shutdown, eFiling and eAccess will be available for taxpayers. Remember that, at least initially, deadlines are not extended during the shutdown. Therefore, taxpayers should still pay attention and comply with statutory deadlines for filing petitions or notices of appeal. You can do so by timely mailing a petition or notice of appeal to the Court.

Mail sent to the Court through the U.S. Postal Service or designated private delivery services may have been returned undelivered. If a document you sent to the Tax Court was returned to you, the Court advises you to try again – but to include a copy of the envelope, box or another mailing package with the postmark or proof of mailing date for your first attempt (you may need to prove timeliness). Only send a copy: you are advised to retain the original.

Also, interest on the tax that you are disputing in your pending Tax Court case will continue to charge during the shutdown. The IRS is continuing to process payments, so if you want to stop interest from accruing, you can make a payment at www.irs.gov/payments.

If you receive a collection notice for the tax that you are disputing in your pending Tax Court case, the IRS might not have not received your petition and has made a premature assessment. When the shutdown ends, the IRS attorney assigned to your case will determine if that happened and if so, request that the IRS abate the assessment. 

There is no advantage to calling: During the shutdown, IRS Chief Counsel and Appeals personnel assigned to your case may be furloughed and will not be available to answer your questions until the government reopens.

You can continue to check the Tax Court website (www.ustaxcourt.gov) for updates.

In the meantime, tax practitioners who are seeking answers about what to do during the shutdown may benefit from a webinar offered by The American Bar Association (ABA). The webinar will examine the impact of the government shutdown on the 2019 filing season and will offer best practices for working with taxpayers during the lapse in appropriations. There is a fee for the webinar. You can find out more here.

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.

As I reported earlier, the United States Tax Court has shut down operations as of Friday, December 28, 2018, at 11:59 p.m. and will remain closed until further notice. The closures are due to the partial government shutdown.

Trial sessions which were scheduled for the weeks of January 7 and 14, 2019, were not affected by the closures. However, the trial sessions scheduled in the following cities for the week of January 28, 2019, are canceled:

  • El Paso, Texas – Judge Elizabeth A. Copeland
  • Los Angeles, California – Judge Patrick J. Urda
  • New York, New York – Judge Joseph H. Gale
  • Philadelphia, Pennsylvania – Special Trial Judge Diana L. Leyden
  • San Diego, California – Special Trial Judge Peter J. Panuthos
  • Lubbock, Texas – Judge Elizabeth A. Copeland

A decision regarding trials sessions scheduled for the week of February 4, 2019, will be made on or before January 18, 2019.

During the shutdown, eFiling and eAccess will be available for taxpayers. Remember that, at least initially, deadlines are not extended during the shutdown. Therefore, taxpayers should still pay attention and comply with statutory deadlines for filing petitions or notices of appeal. You can do so by timely mailing a petition or notice of appeal to the Court.

Timeliness of mailing of the petition or notice of appeal is determined by the United States Postal Service’s postmark or the delivery certificate of a designated private delivery service. The United States Postal Service is not affected by the shutdown. By statute, the U.S. Post Office is an “independent establishment of the executive branch of the Government of the United States.” So while the Post Office is privileged under U.S. law (it has a monopoly on the delivery of first-class mail, for example), it’s not technically run by the government nor is it funded by taxpayers. In fact, the Postal Service hasn’t received federal subsidies from taxpayers for more than 30 years (with limited exceptions related to voting). (For more about the USPS, check out this earlier article.)

It’s important to continue to pay attention to deadlines during the shutdown. The Internal Revenue Service (IRS) will maintain some functions and those are outlined in their contingency plan. For more on what remains open at the IRS through December 31, click here.

For updates, you can check back here or you can check the Tax Court website.

With the Internal Revenue Service (IRS) mostly closed for business, taxpayers have been unable to obtain routine tax transcripts and other documentation used for income verification. Without that information, lenders may be forced to delay financing or refinancing mortgages and other loans. Recognizing the hardship, the IRS has announced steps to offer some relief during the government shutdown.

According to an IRS statement, the agency began processing tax transcript requests earlier this week (as of January 7, 2019) made through the Income Verification Express Service (IVES) program. IVES is a user fee-based program used primarily by mortgage lenders and similar financial institutions to confirm a borrower’s income. The transcript information is delivered to a secure mailbox based on information received from a federal form 4506-T, Request for Transcript of Tax Return (downloads as a PDF) or the shorter version, form 4506T-EZ.

That’s the good news. The not-so-good news is that the IRS can’t promise that requests will be turned around in the normal 72-hour window that lenders are used to. It will, the IRS notes, “take time to bring this service up to normal operating status.” That’s because employees are just now returning to work—and they’re facing backlogs from requests that have piled up since the shutdown began. Your best advice? Plan ahead and be patient.

In addition, the IRS is also restarting other fee-based services such as letters for taxpayers in need of United States residency certification for tax treaty benefits. The agency will also respond to requests for photocopies of tax returns: Taxpayers can submit form 4506 and pay a $50 fee for a copy of each tax return. Again, be prepared for delays: According to the IRS, it can take 75 calendar days to process the request.

If you need information soon—and for free—don’t forget that you can obtain some information online. You can typically click over to the “Get Transcript Online” tool on the IRS website here and view, print or download your transcript (it’s showing an error as of now, but the IRS says that it will be available). You’ll have to register to use the service, which means you’ll need your personally identifiable information (including your Social Security Number, date of birth, filing status and mailing address from latest tax return), access to both your email account and a cellphone with your name on the account, and your personal account number from a credit card, mortgage, home equity loan, home equity line of credit or car loan. The extra information is used to help verify that you are who you claim to be to help protect you from identity theft.

Unfortunately, during the shutdown, you cannot use the toll-free number to order your transcript over the phone (you’ll simply get a recording advising that live telephone assistance is not available).

The IRS has announced that employees will open tax season on time—and issue tax refunds—despite a government shutdown. But don’t plan on spending those tax refund dollars just yet: The National Treasury Employees Union (NTEU) filed a lawsuit alleging the administration is violating the Fair Labor Standards Act (FLSA) by requiring federal employees to work without pay during the partial government shutdown. You can read the complaint here (downloads as a PDF).

The complaint, which was filed in the United States of Federal Claims, is a collective action lawsuit brought by Albert Vieira on behalf of himself and all similarly situated individuals. Vieira is a Customs and Border Protection (CBP) Officer.

The FLSA, which was signed into law in 1938 by President Franklin D. Roosevelt, sets standards for workers in the private sector and in federal, state, and local governments. Those standards include the establishment of a federal minimum wage and rules about overtime pay eligibility.

The lawsuit alleges that the FLSA guarantees on-time payment of any minimum wage and overtime wages earned for covered employees. If wages are earned, but not paid out, on the employee’s corresponding regularly scheduled payday, the FLSA has been violated. According to the NTEU, the FLSA’s timely payment requirement persists even during a lapse in appropriated funds like the government shutdown.

The lawsuit also claims that the FLSA requires that covered employees be paid at least the minimum wage for all hours worked during the workweek.

NTEU is asking the court to order the government to pay compensation for these employees plus 100% liquidated damages. The government has been responsible for paying liquidated damages before for failure to timely pay FLSA wages during a government shutdown as determined in Martin v. United States, 130 Fed. Cl. 578 (2017). In Martin, the court found that the federal government failed to comply with FLSA obligations in connection with the payment of nonexempt, excepted employees during a government shutdown.

Additionally, the Department of Labor has issued guidance confirming that “[i]n general, an employer must pay covered non-exempt employees the full minimum wage and any statutory overtime due on the regularly scheduled payday for the workweek in question. Failure to do so constitutes a violation of the FLSA.” You can read the guidance here (downloads as a pdf).

Since the shutdown began, Vieira and workers like him who have not been exempted from the shutdown have been required to show up for work but have not received a paycheck. “It is unconscionable that many employees are having to work—and in some cases overtime—with no pay whatsoever,” said NTEU National President Tony Reardon.

The number of employees heading back to work without pay is about to grow. The IRS will recall a “significant portion of its workforce, currently furloughed as part of the government shutdown, to work.” Those employees will not be paid until the shutdown is resolved.

The IRS, like the CBP, is represented by the NTEU. The NTEU represents 150,000 employees at 33 federal agencies and departments including the Environmental Protection Agency, Federal Communications Commission, Food and Drug Administration, Federal Election Commission, National Park Service, Patent and Trademark Office, Securities and Exchange Commission and the U.S. Department of Agriculture.

Another labor union, the American Federation of Government Employees (AFGE), has also filed suit over unpaid wages. You can read that lawsuit here (downloads as a pdf). The AFGE is the largest federal employee union representing 700,000 federal and D.C. government workers, including the Department of Veterans Affairs, the Social Security Administration, the Department of Defense, and the Department of Justice.

Currently, about 380,000 federal employees are furloughed, while 420,000 are working without pay due to the shutdown.

Worried about your tax refund during the government shutdown? The White House Office of Management and Budget says that tax refunds will be paid even if the federal shutdown drags on through the filing season.

Traditionally, the Internal Revenue Service (IRS) has not issued refunds to taxpayers while the government is shut down. That appeared to be the case this time when the Department of Treasury posted its Lapsed Appropriations Contingency Plan for the IRS last month. That plan, which noted that tax refunds would not be issued, described the actions and activities following a lapse in appropriations through December 31. (You can read more here.)

However, today acting director of the White House Office of Management and Budget, Russell Vought, declared, “Tax refunds will go out.”

It is unclear how that might happen and how that might impact other IRS operations. Despite signals that the IRS might issue an updated contingency plan last week, no update has appeared on the site.

When the announcement was made, the IRS had not yet announced a start date to the filing season. The IRS announced later in the day that the start date for the new season would be January 28, 2019. Last year, the IRS opened the filing season on January 29, 2018.

The due date for the 2019 filing season remains April 15, 2019, for most taxpayers. However, taxpayers who live in Maine or Massachusetts will have until April 17, 2019, to file their federal income tax returns. (You can read more here.)

Last year, the IRS processed 136,359,149 tax returns during the regular tax season; just over 10% of taxpayers tend to file an extension, bringing the total number of tax returns processed during the year to 154,058,000. Of those returns, over 70% resulted in tax refunds, worth $324 billion to 111,911,000 taxpayers, with the average tax refund check ringing in at $2,899.