Federal shutdown won’t keep IRS away from Ga. taxpayers. Here’s what to know.
In a letter to Jean-Baptiste Le Roy, Benjamin Franklin famously wrote, “In this world, nothing is certain except death and taxes.” That still holds true even when the government shuts down. The tax man still cometh, but he is wounded and limping along.
A government shutdown can be scary and frustrating for taxpayers, especially if you’re waiting on a much-needed refund or trying to address a threatening levy or lien notice.
The good news is that when the government shuts down, the Internal Revenue Service, just like other agencies, doesn’t fully stop working. The IRS has furloughed nearly half of its staff, which means the remainder is on the job. Certain employees are deemed exempt, or excepted, and must continue working, even without pay, per the IRS’s own guidance.
If you were to call the IRS right now, you’ll likely get a representative on the line willing to assist; however, it may take longer than normal. When average wait times can exceed two hours during peak call periods in a normally functioning environment, additional delays can be staggering.
Here are the winners and losers in the shutdown
A government shutdown is a dream if you are trying to lay low from Uncle Sam. The IRS generally has 10 years to collect on a tax bill, and after 10 years, the debt expires. The agency can no longer collect it, and they write it off.
For taxpayers who owe, this could be their opportunity to walk away scot-free. Similarly, the IRS has a three-year window to audit and propose adjustments to filed returns. For taxpayers worried about extra scrutiny on certain deductions they claimed on their tax returns, they, too, are likely cheering on the shutdown as the clock ticks by.
But for taxpayers actively trying to and need to resolve their tax problems, the shutdown is much less exciting.
For example, if you’re trying to sell property and the IRS has filed a federal tax lien against your home, the shutdown could delay closing or derail it entirely.
If you’re appealing an IRS decision and the outcome will generate a large refund to you, the last thing you want is your appeals officer stuck at home. It’s all about perspective.
IRS agents who are on the job are working hard
Even during a shutdown, taxpayer obligations continue. Tax returns must still be filed on time, estimated tax payments and deposits must be paid on time and taxpayers must comply with the myriad of deadlines the IRS requires to appeal certain determinations and actions. When operations fully resume, the agency will still hold taxpayers to these deadlines. It is the government that is shut down, not the taxpayer.
I’ve helped taxpayers navigate many IRS issues during shutdowns in the past, but this one hits differently. For one, the IRS has already been severely understaffed due to massive layoffs and seasoned employees taking advantage of early retirement offers well before the shutdown.
Even while they were fully operational, we have been experiencing significant hurdles in our attempts to resolve conflicts with the IRS. Agents we were working with suddenly vanished, responses we filed went unanswered and matters dragged on much longer than what we typically have seen. The government shutdown, of course, only compounds these challenges.
Still, it’s not all gloom and doom. The agents who continue working — even without pay — have been incredibly helpful and remarkably responsive to us. Despite my expectations, morale isn’t at rock bottom. In contrast, the agents have worked tirelessly to help point us in the right direction and get the help we need.
The IRS is still working, in some instances even harder than ever. So, while we all navigate the uncertainties of a government shutdown, Mr. Franklin’s prophetic statement still rings true, except, perhaps, for a lucky few.
Judson Mallory is an Atlanta-based tax attorney and partner at Wiggam Law, where he helps individuals and small businesses resolve IRS and state tax challenges.
