Shutdown Means IRS Will Collect Your Taxes But Not Pay Refunds

Virginia Carson
January 8, 2019

This means that they won't perform audits, assist taxpayers with questions, or process refunds during the shutdown but will collect taxes.

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During a government shutdown, the IRS can accept returns-but it cannot pay out refunds. But if you're due a refund, well, you may have to wait a long time to get it. With little or no income-tax liability, these taxpayers often use a sizable refund to help pay down debt, the publication says.

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As if tax season isn't enough of a headache, a partial government shutdown is making things worse.

The country's tax collector is among the federal agencies affected by the government shutdown, now in its second week. "That stalemate raises the prospect of an unprecedented extended closure during the individual income-tax filing season, which typically starts in mid-to-late January".

Refunds won't be issued until the government is reopened, which could mean trouble for those hoping to have some extra cash in February or March.

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Right now, the IRS is working under a contingency plan for the non-filing season that has it operating with only 12.5% of its employees. While the plan does say furloughed employees can be recalled during the shutdown, The Wall Street Journal reported that the IRS generally does not issue refunds in that time.

One other area in which the IRS may have problems is the continuing implementation of the 2017 tax legislation passed by Republicans in Congress and signed by Trump.

The agency received two years of funding to implement the new tax law, so some of those activities including devising worksheets and tax forms along with instructions and publications have continued.

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