Washington, D.C. (October 2, 2013)
By Michael Cohn
The Internal Revenue Service has temporarily stopped sending out tax refunds, and the Tax Court has suspended operations during the federal government shutdown, as lawmakers in Congress continue their battle over delaying or defunding “Obamacare” for a year.
The IRS announced contingency plans for the government shutdown on Monday ahead of the looming shutdown (see IRS Releases Gov’t Shutdown Contingency Plan). On Tuesday, with the House and Senate failing to reach an agreement on a budget resolution to continue funding government operations—and with the impasse continuing over the insistence by Republican lawmakers that the health care reform law should be delayed as a necessary pre-condition for agreeing to a budget deal—the IRS elaborated on the shutdown plans on its Web site, including a temporary stoppage in tax refunds.
“Tax refunds will not be issued until normal government operations resume,” said the IRS. The IRS emphasized, however, that the underlying tax law remains in effect, and all taxpayers should continue to meet their tax obligations as normal.
“Individuals and businesses should keep filing their tax returns and making deposits with the IRS, as they are required to do so by law,” said the IRS. “The IRS will accept and process all tax returns with payments, but will be unable to issue refunds during this time. Taxpayers are urged to file electronically, because most of these returns will be processed automatically.”
In addition, the IRS noted that no live telephone customer service assistance will be available. However, most automated toll-free telephone applications will remain in operation. IRS walk-in taxpayer assistance centers will be closed, though.
While federal government offices are closed, people who have appointments with the IRS related to examinations and audits, as well as tax collection, appeals or Taxpayer Advocate cases should assume their meetings are canceled, the IRS noted. IRS personnel will reschedule the meetings at a later date once the government shutdown ends.
In addition, IRS computer systems will continue to mail out automated notices to taxpayers, but IRS employees will not be sending any paper correspondence during the period when the federal government is shut down. The IRS provided some basic steps to follow during this period:
• Continue to file and pay taxes as normal. Individuals who have requested an extension of time to file should file their returns by Oct. 15, 2013.
• All other tax deadlines remain in effect, including those covering individuals, corporations, partnerships and employers. The regular payroll tax deadlines remain in effect as well.
• Taxpayers can file their tax returns electronically or on paper—although the processing of paper returns will be delayed until full government operations resume. Payments accompanying paper tax returns will still be accepted as the IRS receives them.
• Tax refunds will not be issued until normal government operations resume.
• Tax software companies, tax practitioners and Free File will remain available to assist with taxes.
A number of IRS services will remain available, but in a limited way. For taxpayers and preparers seeking assistance, only the automated applications on the regular (800) 829-1040 telephone line will remain open.
The IRS Web site, www.IRS.gov, will remain available, but some interactive features may not be available. IRS Free File partners—tax software vendors who partner with the IRS to provide free tax prep and processing for taxpayers with incomes up to a certain threshold—will continue to accept and file tax returns. Tax software companies in general will also continue to accept and file tax returns, the IRS noted.
Tax Court Closed
The U.S. Tax Court also said on its Web site Monday that it would suspend operations in the event of a shutdown. The Tax Court Courthouse in Washington, D.C., was only open on Tuesday from 8:00 a.m. until 12:00 noon. Petitions, motions and other papers were received only during those four hours on that day. “After 12:00 noon no documents will be received by the court until the shutdown is concluded or the court posts other further notice on this Web site,” said the court.
Documents could be submitted to the Tax Court’s Web site for e-filing only until noontime on Tuesday, October 1, but the Tax Court said it would not receive submissions of documents for e-filing after that time until further notice.
In addition, the Tax Court said it would serve no documents starting Oct. 1, 2013 if the federal government was shut down.
Due dates previously set by a Tax Court Rule or Order for filing a document or completing discovery or any other act will be extended, with all such due dates on or after Oct. 1, 2013 extended by the number of days that court operations are suspended, up to a maximum extension of five days from the date the Tax Court resumes operations. If the extended due date falls on a Saturday, Sunday or a legal holiday as defined in the Tax Code, the due date will then be the next succeeding day that is not a Saturday, Sunday or a legal holiday.
However, the Tax Court said it lacks the authority to extend statutory filing deadlines imposed in the Tax Code. For example, Section 6213(a) provides that a taxpayer must file a petition with the court to re-determine a deficiency within 90 days after the mailing of a notice of deficiency, and Section 6330(d)(1) provides that a taxpayer must file a petition to review a determination involving a proposed lien or levy within 30 days after the mailing of the notice of determination.
Even though hand delivery to the courthouse is not available during the period the Tax Court is closed due to a government shutdown, taxpayers still need to comply with the statutory deadlines by mailing a petition to the Tax Court on a timely basis. “Timeliness of mailing of the petition is determined by the United States Postal Service’s postmark or the delivery certificate of an approved private express delivery company,” the Tax Court noted.
For further information, visit the Tax Court’s Web site at www.ustaxcourt.gov, where notices about the Court’s closure and resumption of operations will be posted and updated throughout the period of any shutdown.
IRS Employee Furloughs
The IRS also provided a link to information for its employees. “An IRS-wide furlough began on Oct. 1, 2013 for everyone except already-identified excepted employees,” said the site.
For continuing information on the furlough, the IRS encouraged its employees to monitor news outlets, the Web page for employees or the 24/7 Emergency Hotline, (866) 743-5748.
The National Treasury Employees Union, which represents IRS employees, said Wednesday that it supports legislation introduced in the House and Senate to provide back pay to federal employees who have been sidelined by the furlough caused by the government shutdown. Sen. Ben Cardin, D-Md., and Reps. James Moran, D-Va., and Frank Wolf R-Va., introduced the Federal Employee Retroactive Pay Fairness Act. Approximately 800,000 federal workers—including many represented by NTEU—were forced off their jobs by the shutdown.
In separate letters to the lawmakers who introduced the legislation, NTEU president Colleen M. Kelley thanked them and stressed that through no fault of their own, dedicated federal employees “are being held hostage—unsure when they might be able to return to their federal offices, unsure whether or not they will be able to make their next rent or mortgage payments, and frustrated and scared about their future.”
The NTEU noted that retroactive pay for shutdown-related furlough days requires congressional action. Such a step was taken in the last government-wide shutdown in 1995 and 1996.
Kelley pointed out that that many federal employees, like many Americans, live paycheck to paycheck and face similar financial obligations and pressures. She also noted that many federal employees have in recent months needed to take unpaid furlough days as a result of sequestration, and that all of them have been operating under a three-year pay freeze.
“NTEU is continuing its efforts not only to bring the current shutdown to a prompt end, but to secure the end of the damaging policy of sequestration and ensure that federal agencies have sufficient funding moving forward,” she said.