How the Government Shutdown Affects the IRS
In anticipation of a government shutdown, the Treasury Department announced on September 27 procedures for the IRS and other agencies under its jurisdiction in the event of a government shutdown after the end of fiscal year (FY) 2013. Only 9 percent of the IRS’s personnel are allowed to work.
The IRS website states: “Due to the current lapse in appropriations, IRS operations are limited. However, the underlying tax law remains in effect, and all taxpayers should continue to meet their tax obligations as normal.”
This shutdown is the first since late 1995. That one lasted 21 days, into 1996. I’m sure you remember. During the 1995 shutdown Bill Clinton was president and unpaid interns were doing work normally done by staff who had been sent home. One of those interns, wearing a blue dress, brought the president pizza.
Five Day Continency Plan
Only 9 percent of the agency’s personnel (about 8,700 of the 95,000 employees) will be allowed to work. The IRS plan states that if the situation lasts more than five days, the IRS would reevaluate its needs.
October 15 Filing Deadline
October 15 is an important deadline. Taxpayers who requested a six-month extension on their 2012 returns are still required to file by Oct. 15. The IRS has announced that all other deadlines remain in effect. There are currently no plans to grant expedited or automatic abatements of penalties for late-filed returns due to the government shutdown. If you miss getting your Form 1040 in by the Oct. 15 extension deadline, failure to file penalties will start.
No Refunds Processed
The IRS is not processing refunds during the shutdown. The “Where’s my refund” service will cease during the shutdown.
Audits have also been halted, to be rescheduled after the IRS resumes operations. Taxpayers with appointments related to examinations or audits, collection, appeals or Taxpayer Advocate cases should assume their meetings are cancelled during the government shutdown. The United States Tax Court has stopped operations.
Taxpayer Assistance Centers
All IRS taxpayer assistance centers are closed during the lapse in appropriations. Taxpayers going to assistance centers in person or contacting assistance centers by telephone are informed that the offices are closed and employees will resume work when funding is available.
IRS Free File
IRS Free File is available during the shutdown. Free File is for taxpayers with adjusted gross incomes of $57,000 or less for 2012. It is actually a group of private tax return-preparation companies whose functions are unaffected by the government shutdown.
Electronic Federal Tax Payment System
The Electronic Federal Tax Payment System (EFTPS) is continuing to process enrollments and payments as normal during the government shutdown. It is very important that you continue to make your tax deposits and payments according to your normal schedule. The AICPA (a CPA group) recommends that as a precaution, you print the confirmation page for any payments you make through the EFTPS.
EFTPS is a free service provided y the Treasury to help business and individual taxpayers conveniently pay all their federal taxes electronically. Taxpayers can schedule payments 24/7 and can enter payment instructions up to 120 days in advance for businesses and 365 days for individuals.
Financial Crimes Enforcement Network
The Treasury Department’s Financial Crimes Enforcement Network (FinCEN) has an electronic filing system for Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR). On its website, FinCEN reported FinCEN E-Filing, FinCEN Query and many programs will operate as usual during the lapse in appropriations.
Affordable Care Act Office
The Affordable Care Act (ACA) Office will remain open during the shutdown. This office is responsible for implementation of ACA. Last Tuesday, October 1, 2013, the exchanges opened. The Department of Health and Human Services contingency plan made it clear that healthcare exchanges will open on schedule. 85% of spending for ACA is considered mandatory – like Congress’ salaries.