shutdown: what to tell tax clients during “the lapse”

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by rick telberg
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the internal revenue service is struggling to continue operations as the nation heads into tax season during the “appropriations lapse,” a.k.a the government shutdown.

some 16,000 irs employees are exempt from the shutdown, and another 30,000 are being called in to work without pay—a total of 57.4 percent of the 80,265 employed before the shutdown.

nevertheless, with four desks out of ten empty, the irs is holding back on most services that require human involvement.

tax practitioners would do well to advise their clients of the following:

  • paper returns will be accepted, but electronic returns are more likely to result in earlier refunds.
  • using e-file or freefile will expedite the refund process.
  • direct deposit refunds are likely to issued sooner than checks.
  • refund fraud and identity theft are at least as likely as last year.
  • automated functions generally continue to operate.

— the irs.gov portal is open and automated applications should be available, among them where’s my refund, the irs2go phone app, and online payment agreements.

— most automated phone functions will be operational.

— automated contact letters, including those regarding audits and collection notices, will still be sent out.

irs personnel are still on duty for any functions necessary for the safety of human life and government property.

more:

curtailed services – other services involving personnel will generally be curtailed.

no live telephone assistance is currently available, though the service says it will soon be adding staff to answer phones. longer wait times can be expected.

taxpayer assistance centers: closed. all meetings scheduled therein: canceled.

taxpayer correspondence will be accepted but in most cases not answered until the service re-opens. expect delays.

tax-exempt organization applications will not be processed during the shutdown.

audit and enforcement activity will remain at a standstill except for automated initial contact letters.

passport eligibility will not be considered or certified. (the state department says that it will continue to receive and process passport applications within the usual timeframes.)

training of personnel on the overhauled tax code is suspended.

it all adds up to a backlog of refunds, audits, and clarifications. the end of the shutdown will not be an end to the problems that taxpayers and tax preparers face this year.