Since the beginning of October, the Federal Government has been shutdown; this includes its revenue branch, the Internal Revenue Service (IRS). According to the IRS website, they softly acknowledge the government shutdown as follows:
Due to the current lapse in appropriations, IRS operations are limited. However, the underlying tax law remains in effect, and all taxpayers should continue to meet their tax obligations as normal.”
Individuals and businesses should keep filing their tax returns and making deposits with the IRS, as they are required to do so by law. With that said, it will only be taxpayers doing tax work during this lapse in appropriations.
The IRS has provided a detailed explanation regarding what services are not available during the lapse in appropriations:
no live telephone assistance
no walk-in availability at local IRS offices
no refunds to be issued
no correspondence will be opened/reviewed
no tax return processing
no third party transcript requests
no installment agreement requests will be reviewed
no hardship status requests will be reviewed
no offers in compromise will be reviewed
no audit, exam, or appeal conferences
no levy releases (presumably).
Although the human functions at the IRS are not functional during the shutdown, plenty of the automated functions of the collection machine will continue to operate, including the issuance of scary collection notices that provide warning of future IRS levy actions. However, levies and liens generally should not be issued during the shutdown, unless it is necessary to protect the government’s interests.
The caveat on continued collection actions is that some levy notices appear to have been sent after the government shutdown because they were post-dated. Additionally, those continued collection and seizure actions in the “best interest of the government” would be extremely limited. Lucky for the government, unlucky for taxpayers, if a particular levy notice or seizure action was actually issued prior to or during the shutdown, it is virtually impossible to get it released until human functions again resume at the IRS.
When human functions at the IRS have eventually resumed after the shutdown is over, it will still take a long time for the IRS to catch up with the damage done. Even one day off at the IRS tends to cause residual delays and bottle-necks. For example, when the IRS observes a national holiday and closes on a Friday or a Monday, the work tends to pile up, making it more difficult for taxpayers to get help for the following couple business days. Additionally, given budget issues throughout 2013, IRS employees have been periodically furloughed throughout the year, and some functions haven’t yet caught up with their work.
Since my clients are normally facing a tax debt they cannot afford to pay, I’m just waiting to use the lapse in appropriations argument to explain non-payment of the tax.
This article is not intended as legal advice, and cannot be relied upon for any purpose without the services of a qualified professional.