The short answer – the impact will be farther reaching than many think. See why in this short video by our own Kevan McLaughlin.
I’d strongly advise patience for anyone seeking resolutions to tax issues this year. Though the federal government promised that refunds would get paid on time and returns filing dates (March 15 for most businesses and April 15 for individuals) stay unchanged, other aspects of the IRS remain unavailable to address outstanding issues.
Since the government shutdown furloughed all non-essential IRS employees, no one can answer phones or work on audits. Some of our clients can’t obtain necessary documents, and certain applications and determinations are not being processed. Even when the political impasse ends, the delays will continue thanks to the growing backlog of work.
All that said, many companies complain most about the lag in adjudicating ongoing tax disputes due to the government shutdown. Congress and the President didn’t modify the statute of limitations to such matters. Put it this way. Organizations and individuals that need to refute an IRS claim to the department, but can’t while the agency stays closed, may not get a proper and timely hearing. For example, our firm currently has a case underway where the deadline for a time-sensitive IRS came and went. The IRS attempted to get more time to respond, but did not get approval before the shutdown. Our client remains unclear if the issue is admitted, denied, resolved, or open.
I don’t know the full extent to which the political crisis will ultimately inflict. I can predict, though, that the impact to tax matters, businesses and individuals will reach farther than many anticipate and, most likely, for all of 2019.
I recommend business owners and individuals keep calm and seek options to prepare for a successful outcome of their IRS tax dispute when the government reopens. We could all find ourselves in limbo for a while.