Legislative / Regulatory | Legislative & Regulatory | Tax | Taxation

Shutdown’s over. It’s business as usual at the IRS … right?

The federal government's partial shutdown is over ... for now, anyway.

On Jan. 25, President Trump signed a bill to end the shutdown for three weeks while negotiations over border security continue.

And since tax season wasn't scheduled to start until today, we're all good, right? For taxpayers, CPAs, and the IRS, it's like nothing happened, correct?

Not so fast.

  • According to The Washington Post, the National Taxpayer Advocate has told officials with the House of Representatives that it will take at least a year for things to return to normal at the IRS.
  • Forbes tax writer Kelly Phillips Erb says the "IRS reportedly has a backlog of 5 million unanswered pieces of mail. ... If the agency can process 20,000 more letters per day, they can wipe out that backlog in 250 business days — roughly, a full calendar year. ... And of course," she adds, "you know that the IRS does more than answer mail." The inevitable result? Delays.
  • Tax refunds could be among those delays. “Just because you reopen the government doesn’t mean that on Day 1 everything is normal,” Jorge Castro, a former counselor to the IRS commissioner, told the Associated Press. "The IRS has not been at full capacity in its operations for over a month.”

The IRS itself, though, insists it's business as usual.

"The agency said it expects to start sending out refunds the first week of February and to pay out many refunds in mid- to late February, as was the case in past years," Naomi Jagoda writes for The Hill. "It also said that like in the past, it expects to issue more than 90 percent of refunds within 21 days of a taxpayer submitting his or her return."

Who's right? As Forbes' Kelly Phillips Erb suggests, we'll have to wait and see.

In the meantime, the shutdown's financial impact on local and national economies is coming into focus.

And the drama hasn't ended. If Congress and the president can't hammer out a deal in three weeks, what then?

Given this Congress and this president, who knows?

I can promise you this, though: It'll be interesting.


Bill Sheridan