The IRS Can't Take Your Questions. It Will Take Your Return.
Tuesday, Oct. 15 is the filing deadline for the roughly 12 million Americans who received an extension on their 2012 taxes. And having 90 percent of its staff furloughed in the partial government shutdown doesn't mean the IRS doesn't want your money.
"The IRS is shut down, but the tax law is never shut down," says Joshua Blank, professor of tax practice and faculty director of New York University Law School's Graduate Tax Program.
One of the few things the Internal Revenue Service is actually doing right now is cashing checks — but it's not issuing them. Don't expect a refund until the government reopens. Most of the agency's other functions are also suspended.
"The IRS is not examining any tax returns for deficiencies," Blank says. "It's not conducting audits. The IRS is not answering phones to answer questions from taxpayers."
The same goes for the media. No one answers the IRS's media line, other than a recorded message about the shutdown.
A Laundry List Of Problems
So instead, I called Margaret Richardson, the former head of the IRS who was in charge during the last government shutdowns in 1995 and 1996.
This time, Richardson's watching the current shutdown from outside government, and says, "I have to confess that I'm really incredulous that it could happen again."
In the 1990s, she says, the IRS office was eerily quiet with so many workers away. There was plenty of black humor among those who remained. But that shutdown came during the holidays. It was a slow time for the agency.
Today is different. Oct.15 has become a big filing day each year.
"I think today's shutdown is potentially much more damaging because it comes as the 2012 filing season is coming to an end," Richardson says.
For those filing electronically or with simple returns, the shutdown won't get in your way, but it is causing a laundry list of other issues.
The taxpayer advocate — whose whole job is to help you solve problems at the agency — is furloughed. The same is true of the whistleblower's office, so there's no way to report suspected fraud. If someone steals your identity and files a fake return in your name, there's no one to call.
And, after you file, the IRS typically has three years to determine whether you've paid enough tax. That clock that is still ticking, even during the shutdown.
"This actually hurts the IRS," says Blank of NYU. "They're losing time from the shot clock, and there's nothing in the statutes that allow the IRS to get back that time."
A Muddle For Accountants
If that doesn't make you sympathetic, the IRS is also currently unable to issue new levies and liens during the shutdown. But if the IRS seized your bank accounts or property by mistake, there's no one there to fix it.
All this is making life difficult for accountants.
"You just have to tell your clients, 'There's nothing we can do,' " says Michele Knight, an accountant who owns Knight Accounting and Technology in Colorado. "You have to write letters, but no one is responding to the letters. So our hands are tied, and it's beyond frustrating."
Most agree there will be more headaches when the IRS eventually reopens and starts dealing with the backlog of questions, problems and investigations.
"If you think about what happens to you when you go on vacation for a couple of weeks — you come back and you have probably hundreds of emails waiting for you, mail to open, voicemail to respond to, and it's difficult to get back to work," Blank says.
Now multiply that by more than 85,000 IRS workers, and it could take a while.