As most of us already know, the recent government shutdown is slowly beginning to have larger repercussions as talks continue within the U.S. Senate. We often hear of the political implications, but what many haven’t discussed are the effects this shutdown will have on the individual tax season.
Here’s what you need to know:
Lack Of Employees
Because the government has been shut down, it means employees cannot be paid. Because it’s against policy to have people working for no pay, much of the federal government’s labor pool has been furloughed, meaning that they’ve been put on a leave of absence as lawmakers work to mediate the negotiation process. What does this mean for the IRS? About 85% of its normal workforce is currently out of office.
Taxes Still Due
Though the shutdown means many day-to-day activities will go unfinished, there is a small caveat: The IRS is allowed to employ individuals who protect critical government property… In other words, taxes. Collectors will continue to receive and process individual income tax forms throughout the filing season, regardless of the situation. This means that regular deadlines are still in effect and that citizens shouldn’t hold back their submissions.
Other Services Delayed
While we are still accountable for submitting our taxes this season, if the shutdown persists, there will be a very visible impact on other IRS services outside of tax collection. During this period of time, there will not be any audits conducted, and any questions that firms or individuals have for the agency will go unanswered, because of the lack of labor. What may stand out the most, however, is that tax returns will be delayed. If the current stagnation continues, taxpayers may have to wait for an extended period of time for their returns to be paid out.
While everyone hopes this is a short-term closure, it is wise to be prepared.