Tax Returns During Government Shutdown
As the government shutdown extends into its third week, many people are worried about how it will affect their tax returns and potential refunds. Recently, the White House Office of Management and Budget publicly addressed those fears, announcing that tax refunds would be released regardless of the shutdown, even though refunds were not released in past shutdowns. At the IRS, only 12% of employees are reportedly still working through the shutdown, though they intend to call back more unpaid workers as tax seasons nears.
Individuals should be able to file as usual starting January 28th and receive a refund if applicable. However, this is the first year of filing since the Tax Cuts and Jobs Act (TCJA) passed in December of 2017. With the vast changes to standard and itemized deductions, there might be some questions. Unfortunately, the IRS is unable to communicate via phone or fax during the shutdown, so any correspondence must be sent through U.S. mail. Even if the shutdown ends, the IRS will be dealing with a backlog of questions for months to come.
Business returns are being accepted, but many businesses may have to delay submission of their filings until the IRS issues guidance on the tax code changes, which likely will not be available until after the shutdown. In the face of this regulatory uncertainty, keep your documents organized and be ready to file once the guidance is released.
Please note: This is not intended as tax advice. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.