Now that the United States government has officially closed its doors, individuals who have extended the filing dates for their federal income tax returns may be wondering whether the October 15 deadline will be postponed until the government reopens. As of this writing, the Internal Revenue Service (the “IRS”) is directing taxpayers to continue to file and pay taxes as they would under normal government operations. So what exactly does the shutdown mean for the IRS and taxpayers?
Under the federal Antideficiency Act (the “Act”), government agencies are prohibited from incurring obligations that are in excess of available appropriations. Nonetheless, during a lapse, such agencies may continue certain activities that fall within limited exceptions to the Act, which include activities otherwise authorized by law and activities necessary to safeguard human life or to protect government property. On September 26, 2013, the Internal Revenue Service (the “IRS”) released a Shutdown Contingency Plan setting forth which IRS functions will continue during the shutdown and which operations will cease.
Taxpayers should first be aware that filing deadlines will continue to apply, and interest and penalties will continue to accrue, as they normally would. Any return postmarked by the due date will be considered timely filed, even though the return may not be processed until the government reopens. Some returns, including electronic tax returns and tax returns that contain remittances, will continue to be processed during the shutdown. Activities pertaining to the protection of liens and seizure cases will carry on, and criminal cases will continue to be prosecuted. Approximately nine percent of the IRS’s staff will be deemed “excepted” and will remain working to perform these essential functions.
The remaining IRS employees, numbering over 85,000, have been furloughed, or placed on temporary status without duties or pay, until the government resumes operations. During this indefinite period, administrative functions not related to the safety of life and protection of property have ceased. Call centers have been shut down, and taxpayer inquiries will remain unanswered. Audits and examinations are suspended, and the examination and processing of non-electronic tax returns that do not contain remittances have terminated. No refunds will be issued until government operations resume.
The Shutdown Contingency Plan describes activities and procedures for the first five business days of a government shutdown. If the shutdown extends beyond five business days, the Deputy Commissioner for Operations Support will coordinate the reassessment of activities and any adjustments to personnel. New information may be forthcoming in the near future now that the shutdown has entered its second week.
The Antideficiency Act (ADA), P.L. 97-258.
Internal Revenue Service FY 2014 Shutdown Contingency Plan
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