The Government Shutdown and Your Tax Refund


Do you remember the 2013 government shutdown when, among any other effects, tax refunds totaling almost $4 billion were delayed?

During a government shutdown, agencies are allowed to perform activities that are supported by funding that doesn't expire at the end of the fiscal year, as well as other activities that are either expressly permitted under the law or are deemed necessary.

The Treasury Department, which includes the IRS, will send home more than 83 percent of its 88,268 workers.

  • About 1,000 employees will stay in place to manage debt, monitor domestic and international financial markets and policy coordination. Another 2,800 workers are exempt from the shutdown to avoid any disruptions with debt borrowing functions, debt collection, investment, debt accounting and Social Security disbursements.

  • Other IRS functions to be suspended include audits, non-automated collections and processing 1040X amended returns, according to a contingency plan dated Jan. 17. (A more detailed list can be found here.audits, return examinations, non-automated collections, and issuing refunds.

The U.S. government is closed. And if it doesn't reopen by Monday, Americans expecting refunds or waiting to hear back from the IRS on an existing audit or other tax matter may be out of luck.

Even before a shutdown loomed, National Taxpayer Advocate Nina Olson warned that the IRS needs more funding and staffing in order to adequately implement the new tax law. That includes a need for more staff to help answer the questions millions of Americans will inevitably have.

Even before the new tax law was signed in December, the IRS was projecting that its representatives would only be able to handle four out of every 10 taxpayer calls in fiscal year 2018.

So how will your tax returns/refunds be affected by this government shutdown?

I'm not sure anyone can accurately answer that, but unless the shutdown continues beyond January 29th, your refunds shouldn't be affected, however, a government shutdown could further delay refunds that already take longer to distribute, including the Earned Income Tax Credit -- a credit for low-income taxpayers -- which by law cannot be refunded until mid-February.

So in the short term, the people most likely to be affected by the halt on refunds are those who are owed them for earlier tax years.

But if there is a shutdown lasting longer than January 29th, that doesn't mean you should put off filing your taxes early. The breach at Equifax in 2017 means it's more important than ever to file early this year, before fraudsters attempt to do so on taxpayers' behalf in hopes of stealing their refunds.

There are MANY issues that will likely affect your tax returns and/refunds this year, so please don't hesitate to contact our office with any questions you may have.


#1040 #IRS #individualtax #taxreform #taxrefunds #taxpreparation #tax #taxseason #smallbusiness

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Strive Tax & Accounting, LLC

CPA's specializing in small business tax and accounting with emphasis in construction and manufacturing for corporation and passthrough entities.

PO Box 28353

Green Bay, WI 54324

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