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Tax Law Explained FLASHPOINTS January 2019

January 15, 2019Print This Post Print This Post

Keith B. Baker, CPA, JD, Law Offices of Keith B. Baker, Ltd.,Skokie
847-933-0200 | E-mail Keith Baker

Shutdown Impacts IRS and Taxpayers

The IRS has been working this past year to deal with the most significant changes to the income tax laws since 1985. Even when there are modest changes to the income tax laws, the IRS has to scramble to get everything ready.

It is estimated that the IRS has sent 90 percent of its staff home due to President Trump’s partial shutdown of the federal government. After losing 90 percent of its staff since December 22, 2018, it is hard to imagine that the IRS will be ready for the onslaught of tax filings, processing, assistance, etc., that come around this time each year even when there are no significant tax law changes and even if there was no shutdown.

The Office of Management and Budget (OMB) has, in past shutdowns, directed the IRS not to issue refunds while the government is shut down. Recently, the Commissioner of the IRS confirmed that is the position of the IRS that many years ago, Congress permanently appropriated money to pay refunds and that it supersedes a lapse in annual appropriations (31 U.S.C. §1324).

The President has not yet intervened to prevent the IRS from issuing refunds during the shutdown. Of course, even those IRS employees who come back to work to process refunds will not have worked since December 22, 2018. This means that they are returning to a backlog even before they get to new refunds. It should be noted that those IRS employees that will be brought back to process the refunds likely will not be paid, if at all, until sometime after the shutdown ends, which is not a likely incentive or motivator for an employee.

The IRS confirmed that it will begin processing 2018 income tax returns beginning January 28, 2019.

For more information about tax law, see STATE AND LOCAL TAXATION — 2017 EDITION. Online Library subscribers can view it for free by clicking here. If you don’t currently subscribe to the Online Library, visit www.iicle.com/subscriptions.

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