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With Shutdown, Taxes Still Due But You Can't Ask IRS For Help

03 October 2013   (0 Comments)
Posted by: Author: Kelly Phillips Erb (Forbes)
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Author: Kelly Phillips Erb (Forbes)

It’s official. After Congress failed to reach an agreement, the federal government has shut down.

With any luck, it will be quick and painless. But in the interim, the country is going to be doing a bit of a shuffle, trying to figure out what’s open, what’s closed and what it all means.

There’s good news and bad news for taxpayers.

The good news first: no audits! The Internal Revenue Service is suspending all audit activities while the federal government is shut down.

And that’s pretty much it for good news.

Here’s the bad news: if you’re on extension, your 2012 federal income tax return is still due on October 15, 2013. And yes, the IRS will cash your check on time.

But the door doesn't swing both ways. If you are due a refund, it will likely be delayed (the extent of the delay is largely dependent on the length of the shutdown).

Walk-in assistance centers for taxpayers will be closed. Similarly, the IRS will not pick up the phones: all telephone hotlines would be closed.

Only 8,752 employees (just under 10% of total IRS employees) will report for work as "excepted employees” during the shutdown. Included in the list (report downloads as a pdf) are the Acting Commissioner; the Deputy Commissioner for Services & Enforcement; the Deputy Commissioner for Operations Support and the Chief of Staff.

Also on the "excepted employees” list are a number of appeals staff and a number of lawyers to ensure that statutory deadlines are met. Missing deadlines affects IRS as much as it does taxpayers and the IRS is assuming (as we all are) that Tax Court and other federal courts will remain open. If courts do close, then those affected attorney would switch over to "non-duty” status.

Seven staff will remain on duty in the Communications and Liaison Office. Those folks will coordinate information regarding the shutdown, furlough status and recall. They will also facilitate information with the taxpaying public and Congress.

Forty-five employees will stay on with the Taxpayer Advocate Service; those are personnel considered necessary for the protection of statute expirations, bankruptcy, liens and seizure cases. Specifically, Nina Olson (the National Taxpayer Advocate) will go to work, as will her executive and staff assistants and her senior advisor. Additional directors and deputies needed to provide oversight will also report during the shutdown.

Of course, the Affordable Care Act (ACA) Office will remain open: that office is responsible for coordinating the implementation of ACA. October 1, 2013, is a big ACA day (the exchanges open, among other things) so these offices are bound to be busy. In fact, a number of ACA related positions are "excepted” and those personnel will report to work.

A significant number of Criminal Investigation (CI) employees – more than 3,500 – will also report to work. This makes sense: if the bad guys don’t take a break, neither should those in pursuit of them. Currently, CI is working nearly 4,600 active criminal investigations with even more in the adjudication phase. That means that right now, nearly 9,000 investigations are in process on some level: special agents are actively gathering evidence, conducting critical interviews, testifying in court proceedings, executing search warrants and conducting arrests. CI will basically continue at "normal” levels since federal courts, federal prosecutors and federal law enforcement partners are operating with business as usual.

Just over 100 employees in the Large Business and International Division (LB&I) and just over 300 employees in the Small Business/Self-Employed Division (SB/SE) are "excepted” in order to ensure statutory deadlines are met. A mere 20 employees are "excepted” in the Tax Exempt and Government Entities Division (TEGE) for the same reasons.

The Office of Professional Responsibility and the Office of Online Services (OLS) will each retain a handful of employees. OLS has to remain online for, among other things, launching the ACA pages on IRS.gov. Additionally, the Privacy, Governmental Liaisons & Disclosure Division (PGLD) – the folks that ensure the proper protection and sharing of taxpayer data – as well as the Online Fraud Detection & Prevention (OFDP) office will be staffed at some level.

Employees considered "non-excepted” will be furloughed. Those "non-excepted” folks include auditors, some lawyers (admit it, you’re trying to think of a joke about lawyers not being essential) and the entire Whistleblower Office. They also include research, analysis and statistics personnel. Employees will know to report (or not) by letter, issued via email.

When it’s time to go back to work, IRS will contact the media to "help facilitate news coverage of reopening as necessary.” That means – and I’m not kidding – that "employees are expected to listen to radio and/or television broadcasts to learn when an appropriation or continuing resolution has been signed and to confirm the agency’s operating status using either the IRS Emergency Information Hotline or IRS.gov.” Of course, it would follow that the Media and Publications Office will retain some staff during the shutdown to make sure the word gets out.

It’s a lot to process. And even with a fairly detailed explanation about who will be at work – and who might not be – it’s still fairly confusing. I’ll update you as information becomes available.

This article first appeared on forbes.com


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