The IRS Budget and Budget Cuts

The IRS has an annual current budget of about $12 Billion but has been tasked with reducing the budget by about $600 million in 2013. In addition, lots of tax changes and the IRS’s new responsibilities to enforce ObamaCare have created additional work for the service. As a result there are lots of pressures on the IRS to do more with less. And it appears this is going to be a significant challenge.

Just yesterday, the IRS made the following announcement:

WASHINGTON — The Internal Revenue Service announced today additional details about the closures planned for May 24, June 14, July 5, July 22 and Aug. 30, 2013.

Due to the current budget situation, including the sequester, all IRS operations will be closed on those days. This means that all IRS offices, including all toll-free hotlines, the Taxpayer Advocate Service and the agency’s nearly 400 taxpayer assistance centers nationwide, will be closed on those days. IRS employees will be furloughed without pay. No tax returns will be processed and no compliance-related activities will take place.

How this impacts the IRS duties of receiving, reviewing and auditing taxpayer submissions remains to be seen. But it seems pretty clear that there will be changes coming. Stay tuned.