Since President Donald Trump persistently refuses to sign a spending deal that doesn’t include $5 billion for his wall at the US-Mexico border, the federal government remains partially shut down. But as an American, you’re probably wondering: Should I worry about the shutdown affecting my tax returns and refunds?
The answer is, no. You don’t need to worry about the government shutdown affecting your tax refund or any other processing because the Internal Revenue Service (IRS) which handles federal taxes wasn’t planning on tax season to completely start until later in January. You’ll be able to mail in or submit your tax returns to the IRS once they begin to accept them online whether or not the government is still shut down.
However, you may expect some delays and other serious concerns at the IRS if the shutdown lasts longer. If you don’t what the IRS’s contingency plan is, it only explained how they would handle the first five business days through December 31 of a shutdown. The plan will be reworked and the agency will proceed to more uncertain territory that could demand employees of the agency to work without pay as a shutdown lasts longer.
The IRS planned to keep 12.5 percent of its workforce, or fewer than 10, 000 federal employees working while the government is shut down. Other IRS workers who are furloughed, which is tens of thousands of them, will not be paid or expected to show up to work for the meantime.
However, Politico reported that as tax filing season begins, the situation could change and some workers will receive a call to get back to work but expect no payment for their work. They will receive back pay once the government opens again.
The IRS will be able to continue a few operations in the short term specifically functions that automatic (and require limited to no workers) and those deemed “necessary for the safety of human life or protection of government property” thanks to the remaining workers and those called back without pay. Several examples are processing electronic returns, processing returns with payments, mailing tax forms, appeals, criminal law enforcement,, and investigations, and technical work to ensure computer systems are functioning well.
Even if the shutdown lasts until February, taxpayers will still be able to mail in tax returns or submit them online.
Although tax filing season begins in January, tax refunds may not be issued because the IRS usually takes a few weeks to start getting refunds out.
All of this only means one thing: the sooner the shutdown ends, the lesser impact there is for 2018 tax refunds. You have to expect at least some delays on the refunds if the shutdown lasts beyond the first weeks of January.
The only group that could be affected by this are those still waiting on tax refunds from before 2018. You won’t get that money as long as the government remains closed down.
Others functions including audits, return examinations, non-automated collections, and 1040X processing, and a few more operations will also be stopped by the IRS. It still depends on how long the government shuts down but they IRS may choose to start these functions no matter what. That could be bad news for employees carrying out this work as they won’t get paid for it until a spending deal is agreed between Trump and the Congress.
The IRS may also face problems regarding the continuing implementation of the 2017 tax legislation passed by Republicans in Congress and signed by Trump. The law’s implementation as noted in the IRS’s contingency plan says “requires creating or revising hundreds of tax products including worksheets and tax forms, form instructions and publications as well as changes to current IRS policies and procedures.” It’s highly possible that the shutdown will stall that work.
The main concern here is obvious: the longer the shutdown goes on for, problems will get even much worse. The contingency plan the IRS has already needed to be updated since the shutdown has lasted longer than five days. The IRS will have to make a lot more changes on the spot if the shutdown lasts much longer.
