Government Shutdown Impact on IRS

The federal government shutdown that started last evening at midnight will have an impact on the Internal Revenue Service. Many of its non-essential employees are being furloughed and will not return to work until after Congress passes an appropriations bill that will allow the government to re-open.

This reduction in non-essential staff at the IRS will affect it’s ability to provide customer service, conduct audits, respond to mortgage income verifications, process tax transcripts requests, develop regulations related to provisions of the recently passed Tax Cuts and Jobs Act that will impact tax filings next year. All of these functions, as well as other activities, are considered not essential and will be curtailed until the shutdown is over.

However, certain essential functions performed by the IRS should continue to operate without interruption. The ability to electronically file tax returns, including HUB testing continues. The filing and processing of tax returns is considered an essential activity for the IRS and will continue. Accordingly, tax preparers and taxpayers should continue to file their 2017 tax returns as usual.

At this time it not clear what impact the government shutdown will have on the issuance of refunds, but no refunds are scheduled to be issued until after the official start of electronic filing which occurs on January 29th and refunds where the taxpayer claims either Earned Income Credit or Additional Child Tax Credit will not be issued until after February 15th.

As more information becomes available, it will be posted on this blog.