So the Government Shut Down. Expect To Get Your Tax Return Refund Late(r)

The bad news is democrats and republicans were unable to reach an agreement on government spending by the midnight deadline.

The good news is it’s the weekend and negotiations are still on the table.

The shutdown comes one year after Donald Trump’s inauguration. How convenient.

With the IRS accepting tax returns on January 29th, the latest in history, taxpayers are frantic about how the government shutdown will affect their returns and refunds.

Why did government shut down?

Long story short: Although the GOP controls the senate and the White House, they needed 60 votes to pass a bill on government spending. There are 51 republican senators. Out of 51, 5 objected the bill and one sustained. They would’ve needed 9 Democratic votes anyway even if they all handed together.

House Majority leader Mitch McConnell cast a no vote to put the bill up for reconsideration.

Late last night house republicans approved a bill that will kept some government entities still running into mid-February in case of a shutdown.

There are still government processes that will run as normal, such as the IRS, which officially begins the 2017 tax season January 29th. But Nearly half of IRS staff is subject to furlough due to shutdown.

“If the IRS is confronted by a lapse in appropriations during the 2018 Tax Filing Season (January 1 – April 30, 2018) the IRS will need to continue return processing activities to the extent necessary to protect Government property, which includes tax revenue, and maintain the integrity of the federal tax collection process, along with certain other activities authorized under the Anti-Deficiency Act.”

What will happen to IRS when government shuts down?

• No tax refunds issued

• No processing of non-disaster relief transcripts

• No processing of forms 1040X, amended returns

• No non-automated collections

• No audit or examinations (some exceptions apply)

• No whistleblower office activity

• Processing of returns with payments

• E-filing

• Mailing tax forms

• Appeals (statutory deadlines will not be changed)

• Call centers (only during filing season)

• Civil and criminal tax cases

• Certain communications to taxpayers

• Active criminal investigations


Does IRS have some sort of backup plan to prevent this from happening?

In case of a shutdown, IRS plans to keep about 35,000 employees, or 43% of staff, that includes:

  • 10,000 customer service personnel
  • 3,000 IT personnel
  • 3,000 criminal investigation personnel
  • A dozen of tax advocates with remaining “on call”
  • A few tax attorneys, with remaining being “on call” unless the federal courts close due to furlough and then attorneys are furloughed too

What a way to kick off the new year.