How the Government Shutdown Affects Your Taxes

11 Oct

As almost everyone has heard by now, the US government has shutdown a majority of it’s operations. While this affects many different agencies, one hit particularly hard was the Internal Revenue Service, who has less than 10% of its 94,000 plus employees working right now. Many are left wondering the ramifications of these developments from a tax perspective.

Shutdown and Paying TaxesFirst things first, the October 15th deadline is still in effect for those who filed an extension back in April. You still have to file. You still have to pay. What about those who lost their W-2′s, 1099′s, or were looking for assistance? Well you may be out of luck as you will be told that no one is there to answer your call. What about those who are expecting a refund? Unfortunately, the IRS is not issuing refunds until the shutdown is over. What about the thousands of people each day who receive notices from the IRS that they either disagree with or don’t understand? Those people are stuck for now too, getting the opportunity to contest or sort out the issues once the voices on the other side of the phone are back.

While this may seem unfair to many people, there are some who will benefit from the shutdown. Specifically, those who would have been hit with a lien or levy as a result of unpaid taxes are in luck, as no new liens will be filed nor property seized. However, this is not an absolute stoppage, as the IRS is still using some of its small workforce to do some collection activity in criminal cases and in limited situations.

The shutdown has caused inconvenience and hassle for taxpayers, but it’s not the fault of the IRS, as it didn’t make the decision to send home over 90% of its employees. It will be interesting to see what sort of arguments taxpayers make as the inevitable disputes arise from the shutdown. For now, at least the IRS website still works, which is more than can be said about other government-owned sites.

This post is provided for informational purposes only and does not constitute legal advice. It is intended, but not promised or guaranteed to be current, complete, or up-to-date and should in no way be taken as an indication of future results. It is not intended to create an attorney-client relationship and is offered only for general informational and educational purposes. You should not act or rely on any information contained in this website without first seeking the advice of an attorney.

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