If you ask the White House how the current government shutdown is going to affect tax season, the answer is that it’s not. According to IRS Commissioner Chuck Rettig, “We are committed to ensuring that taxpayers receive their refunds notwithstanding the government shutdown.”
But if you read between the lines and read what has been going on, there’s a different story to be told – 
one that tax professionals should pay attention to. Here’s a quick rundown of what’s happened so far:
- The government shutdown begins and many IRS employees are furloughed alongside other government workers.
- In mid-January, the IRS calls 46,000 employees back to work to help handle the start of the 2019 tax season.
- On Monday, the Practioner Priority Line partially opened up ACS, which is collections for taxpayers who had pending issues prior to the shutdown.
Seems like the 46,000 employees who were called back should be able to get it done, right? Here’s the thing, they’re still not getting paid. Because they are still not getting paid, many of them are working from home because they can’t afford childcare, transportation, or other job-related expenses. Some of them are not working in protest, and many are taking advantage of hardship leave, an exemption that allows IRS employees to be absent from work without using sick days. And let’s be honest, what does working really look like when you’re not being paid and have no idea when you will be paid?
So let’s add all this up: less IRS employees, many working from home and not at their desks, many struggling to get by, and all not being paid. How efficient do you think the IRS is going to be when tax season opens and the government is still shut down? As one IRS employee put it to CNN Money, the season is “going to be a disaster all around.”
To us that means possible refund delays, not being able to reach anyone at the IRS for guidance or questions (remember, on top of all this there are new tax laws to deal with), and lots of taxpayers with tax-related needs and questions.
As a tax pro, taxpayers are going to need you now more than ever. They are facing possible delays in refunds, a new tax law that is not simpler than the last, and no one to answer the phone at the IRS. It’s your time to shine but be wary fo a few things:
- Don’t promise your clients that anything is going to happen.
- Tell clients to expect delays.
- Encourage clients to come in as early as they can to get their taxes filed.
- For clients with collections issues, although the ACS has opened up some services, you still can’t fax new power of attorneys and many preparers who called for help were on hold for 1-2 hours. While you may be able to do some things for clients, our advice is don’t delay trying to get what you need from because they may be there now, but they may not be for long if this continues.
- Some items in the new tax law are still being decided on and it is uncertain when final decisions on those will be made.
We’re four days away from the start of the tax season! Expect nothing and prepare for everything. In case you missed it, check out our most recent Tax Talk Live broadcast on The Income Tax School Facebook Page. Ty and LuSundra covered the shutdown and lots of other pressing tax news. Listen here.