Wednesday, January 24, 2018

The beginning of tax season almost got off to a strange start with the brief government shutdown that began over the weekend. A temporary measure passed Monday kept this from becoming an extended issue, but the story is far from over.
Ahead of the shutdown, the IRS issued its “FY2018 Lapsed Appropriations Contingency Plan.” Interestingly, this did not say that tax returns would not be processed, but that they would happen, “to the extent necessary to protect Government property, which includes tax revenue, and maintain the integrity of the federal tax collection process.” What this pretty much sounds like is that the government would accept tax returns and payments, but there was nothing about refunds, and taxpayer services would be, at best, extremely limited.  .
The plan estimated that only about 43 percent of the IRS’s staff would be retained in the event of having no funding. That comes on the heels of the IRS stating that it would need increased funding just for the implementation of the recent Tax Cuts and Jobs Act. Of course, this also happens in the shadow of almost a decade of financial cuts for the agency that have resulted in fewer audits and longer wait times for those who need to contact the IRS.
Congress’s actions Monday kept all this from becoming an immediate issue, but it only covered funding for the government for a few weeks. Granted, things may work themselves out over that time, but that is clearly no sure thing. So what does this mean for tax filing?
First, if you are ready to go forward, there seem to be good reasons to not procrastinate filing your taxes The IRS is slated to begin accepting returns on Monday, January 29, and in a time of uncertainty, there could be some comfort in knowing that your obligations have already been taken care of.
Second, though, this also becomes a good time to pass along a reminder that if your return claims the Earned Income Tax Credit or Additional Child Tax Credit, any refund could be delayed. In an effort to combat fraud, the IRS expects to hold such refunds until the week of February 27th at the earliest. This includes the entire refund, and not just the portion associated with the credits, and this will be the case no matter how any potential government shutdowns play out.
Finally, do not overlook what the IRS said that it for sure would still do, and that is protecting the government’s tax revenue. No matter where things go, the federal government is still going to expect your tax return and any payment it is due by the April 17th deadline. Even if we enter a scenario where there is a huge backlog of tax returns that need to be processed, the IRS is going to note when you filed the return, not when it was processed, when it comes to any potential penalties.
Also, rest assured that we remain ready to ramp up our efforts throughout tax season. We will not be shutting down and instead will be standing by you no matter where the path leads

No comments:

Post a Comment