How Does the Government Shutdown Affect the IRS?

Government ShutdownNo one knows just how long the first government shutdown since 1996 will last. However, those of us in the tax business are certainly concerned with what can and cannot be done while it continues. Allistair M Nevius, The Journal of Accountancy‘s Editor In Chief, Tax, gives us the lowdown on what services the IRS will and will not provide during the shutdown.

What remains open?

The IRS will continue to process tax returns that contain remittances and all e-filed returns. There are no postponements of any return filing deadlines.

The IRS’s Oct. 1 description of operations during the shutdown says that, “Tax refunds will not be issued until normal government operations resume.”

Preparations for next filing season…will also continue.

The IRS will take steps to protect ongoing bankruptcy, lien, and seizure cases.

The IRS website (irs.gov) will stay up.

IRS criminal law enforcement and undercover operations will continue.

What is closed?

The shutdown brings a stop to all IRS taxpayer services, such as responding to taxpayer inquiries.

During the shutdown, all IRS audits and examinations will stop. All non-automated collection activity will also stop.

The IRS will not process paper returns that do not contain remittances.

All IRS headquarters and administrative functions will shut down.

The Office of Professional Responsibility will be closed. However, the Return Preparer Office, will remain open.

Approximately 86,000 IRS employees will be furloughed.

The IRS’s contingency plan covers the first five business days of the shutdown. After that, if the shutdown continues, the IRS deputy commissioner for operations support will assess what needs to be done.

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