The IRS has reopened under a three-week stopgap spending bill as the 2019 tax filing season gets started. The IRS began accepting returns for the 2018 tax year on January 28.
Impact of IRS, Treasury Shutdown
The IRS and Treasury were significantly impacted by the 35-day partial government shutdown, which ended on January 25. While the IRS was preparing for the start of this year’s tax filing season, close to 90 percent of its workforce was furloughed.
Reportedly, the IRS is busy catching up on various operations and requests that are backlogged because of the shutdown.
Additionally, many tax forms and instructions are still pending and in draft stages, the American Institute of CPAs (AICPA) recently noted in a letter to the IRS and Treasury. These delays will likely result in issues with the readiness of tax preparation software, according to the AICPA.
Issuing Tax Refunds
Accordingly, lawmakers and practitioners have expressed concern about the potential affect the shutdown could have on refunds. However, Treasury Secretary Steven Mnuchin has said tax refunds will be issued in a timely manner.
“We’re taking tax returns. We’ll be ready for tax refunds. We’ll have the phones re-staffed,” Mnuchin said in a January 29 televised interview. “We are ready for tax season, and I can assure you that tax refunds will be paid as normal.”
Likewise, the IRS announced in IR-19-07 that it will begin issuing refunds during the first week of February, similar to previous years. Further, the IRS has said it expects to issue more than nine out of 10 refunds in less than 21 days.
“The dedicated IRS employees have worked tirelessly to successfully implement the biggest tax law changes in 30 years and launch tax season for the nation,” IRS Commissioner Charles “Chuck” Rettig said in a statement. Additionally, Rettig encouraged taxpayers to minimize errors and refund delays by doing the following:
- electronically file returns through IRS’s e-file feature, and
- use the IRS Free File tool along with direct deposit.
Stopgap Bill and IRS Contingency Plan
Federal agencies, including the IRS and Treasury, are headed toward another lapse in appropriations on February 15 when the current stopgap spending bill is set to expire. Thus, Congress will need to approve a bipartisan government funding bill to keep the agencies open through the 2019 tax filing season.
An IRS spokesperson told Wolters Kluwer on January 29 that the revised IRS Fiscal Year 2019 Lapsed Appropriations Contingency Plan will govern IRS operations through the remainder of the filing season in the event of another partial government shutdown.
According to the plan, the IRS operations listed below are deemed as “non-excepted activities” during a shutdown. This means employees overseeing the following activities would likely be furloughed:
- Processing Non-Disaster Relief transcripts;
- Most Headquarters and administrative functions not related to the safety of life and protection of property;
- All audit functions, examination of returns, and processing of non-electronic tax returns that do not include remittances;
- Non-automated collections;
- Legal counsel;
- Taxpayer services such as responding to taxpayer questions (call sites) (during Non-Filing Season)
- Information systems functions (except as necessary to prevent loss of data in process and revenue collections); and
- Planning, research, and training and development activities (except as necessary to perform excepted or exempt activities).
By Jessica Jeane, J.D.