October 1, 2013 marked the first day of the shutdown of the federal government--the first since 1995-1996. Without a clear idea of how long this "lapse in appropriations" is expected to continue, here's a look at how taxpayers are affected.
During the shutdown, approximately 86,000 IRS employees have been furloughed and IRS operations are limited. Despite this, tax law remains in effect, and in that respect it's "business as usual."
Individuals and businesses should keep filing their tax returns and making deposits with the IRS, as they are required to do so by law. 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.
Where's My Refund?
Although the IRS will accept and process all tax returns with payments, it is unable to issue refunds during the shutdown. Tax refunds will not be issued until normal government operations resume. This includes the "Where's my refund?" service.
October 15 Tax Filing Deadline
Individuals who requested an extension of time to file should file their returns by October 15, 2013. According to the IRS, more than 12 million taxpayers requested an automatic six-month extension this year, but have yet to file.
Members of the military and others serving in Afghanistan or other combat zone localities typically have until at least 180 days after they leave the combat zone to both file returns and pay any taxes due. People with extensions in parts of Colorado affected by severe storms, flooding, landslides and mudslides also have more time, until Dec. 2, 2013, to file and pay.
Taxpayers are urged to file electronically, because most of these returns will be processed automatically. You can file your tax return 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 software companies, tax practitioners and Free File will remain available to assist with taxes and continue to accept and file tax returns.
For taxpayers seeking assistance, only the automated applications on the regular 800-829-1040 telephone line will remain open.
The IRS website, www.IRS.gov, will remain available, although some interactive features may not be available.
Individual taxpayers are still able obtain to tax transcript using the automated process. Transcripts will be sent to their address of record within 5 to 10 calendar days. Please note however, that during the shutdown transcript requests by third parties, such as financial institutions, cannot be processed through the Return and Income Verification Services and Income Verification Express Service. These processes are not automated and require actions by IRS employees, are not available due to the current lapse in government appropriations.
Levies and Liens
During the shutdown, no levies or liens--either those generated systemically or those manually generated by employees--will be issued; however, taxpayers may still receive levy or lien correspondence with October mailing dates. These notices were printed before IRS shut down operations were fully complete. It is standard practice for these notices to be printed with a future date to allow for mailing time to reach taxpayers.
In addition, the IRS notes that other letters related to liens and levies, such as notifications that a taxpayer could potentially be subject to a lien or a levy at a future date, continue to be automatically generated by IRS systems during the appropriations lapse.
Note: These notices are not actual levies or liens; just a notification of potential future action. Please contact us if you need more information.
During the shutdown, the only enforcement actions undertaken by the IRS for non-criminal cases involve isolated instances where immediate action is necessary to protect the government's interest. As such, any enforcement action in this category, seizures for instance, would be extremely limited, for example, where the expiration of the statute of limitations on collection action is imminent.
For criminal issues, most IRS Criminal Investigation employees continue to work during this period, similar to other federal law-enforcement agencies, as well as undercover operations.
Tax Court closed at noon on Tuesday, October 1 and stopped accepting and serving documents such as petitions and motions, as well as electronic filings and hand deliveries. For those with deadlines that cannot be extended (i.e. set by statute), documents may be sent by US mail. The postmark serves as the filing date. If you have any questions relating to tax court, please contact us.
IRS - Miscellaneous
During the shutdown, all IRS audits and examinations will stop. All non-automated collection activity will also stop.
During the shutdown, the IRS will take also steps to protect ongoing bankruptcy, lien, and seizure cases and to prevent lapses in the statute of limitation.
Social Security checks will continue to be issued and mailed out via US mail, which is not shut down as it is not funded by the federal government. Field offices are open, but assistance may be limited.
Don't hesitate to call us if you need assistance. We're here to help!