Government Shutdown and What It Means for Taxpayers

As President Trump and Congress continue to work to reach a deal to reopen the federal government, the partial shutdown continues to affect government agencies, including the Internal Revenue Service (IRS). In preparation for the shutdown, the IRS released a Fiscal Year 2019 Lapsed Appropriations Contingency Plan in November 2018, allowing the IRS to continue processing certain tax returns with payments and accept disaster-relief related transcript requests. The IRS also announced that the 2018 filing season will begin on January 28, 2019.

The following activities directly affecting taxpayers would normally cease during a government shutdown:

Tax refunds (The IRS announced on Monday, January 7, 2019, that it would continue to issue refunds even if the shutdown continues into tax season, but legal challenges have been cited.)

  • Processing transcripts (except those related to disaster relief)
  • Processing amended returns or Forms 1040X
  • Non-automated collections
  • Audits or examinations
  • Legal counsel
  • Call center availability

The following activities would normally continue during a government shutdown:

  • Processing returns with payments
  • Processing disaster relief transcripts
  • Appeals
  • Active criminal investigations
  • E-filing
  • IRS.gov website

Taxpayers should continue to file and pay taxes as normal, since the government shutdown does not affect filing date deadlines or payment deadlines for any type of tax collected by the IRS, including payroll taxes. While the IRS has stated that tax refunds will be issued this filing season, taxpayers should be mindful that refunds received may still be delayed.

The IRS strongly encourages electronic payment through the Electronic Federal Tax Payment System (EFTPS) for faster refunds and less errors when paying. Payroll tax deposits may also be paid through EFTPS during the shutdown. Once enrolled, you can also make payments by calling the EFTPS voice response system.

For further information regarding this tax filing season, please reach out to us at tax@dhg.com.

Nathan Clark
Partner, DHG Tax
tax@dhg.com