Taxes & The Government Shut Down

It happened 17 years ago. And it’s happened again. September 30th has now passed and Congress failed to reach a compromise measure to keep the government funded. So effective October 1st, the impact is being felt. The country’s largest employer (the US Government) is now furloughing employees in virtually every department and division. Supervisors were previously instructed to identify critical and non-critical positions. The non-critical positions were sent home, the remainder skeleton staff stayed to try and keep things running.

So what does it mean for the IRS? Well, approximately 80% of the Treasury’s 110,000 employees were sent home and that’s the department that runs the IRS. Until Congress gets the funding compromise in place, that’s where they’ll stay. To accommodate the shut-down, the IRS:

  1. Suspended all audit activity.
  2. Suspended all personnel associated with processing tax refunds.
  3. Kept all personnel involved in cashing tax checks.
  4. Suspended virtually all customer service agents – which means it will be VERY difficult to get any information from the IRS.
  5. Maintained computer/information system services – so the IRS Website is still up and Tax Professionals are still able to obtain tax information online.

And if you ask me, that’s a mixed bag. The audits on hold are a highlight for taxpayers but the rest is pretty much a mess. Once the funding compromise is reached – who knows when that will be – operations will resume again but the backlog will take some time to address.

So buckle up. The ripples of partisan politics will be showing up even in the tax world.

By: Evan A. Nielsen (Licensed in California)