With the US Government going through a shutdown, a lot of government workers have been furloughed. This includes the IRS too, which lost its funding for the fiscal year 2019 on December 21st. This has forced the IRS to operate under a contingency plan that lays off more than 88% of its workforce. A mere 9,946 number of employees are considered exempt and are continuing to work. All IRS audit and examination functions and non-automated collections have also been put on hold for the duration of the shutdown.
The IRS has been majorly affected because it was already not funded from September 2019 itself. Temporary funding was enacted in the Continuing Appropriations Act, 2018, Division D of P.L 115-56 which was further extended to December 22 by P.L 115-90. This plan was intended to take care of a shutdown of 5 days. However, certain activities continued even during the shutdown, including the issuance of refunds, processing the returns from 1040X amended returns, audit functions, examination of returns, processing of paper tax returns, processing of paper tax returns that did not include remittances, and taxpayer services like answering citizens’ queries.
Activities that stopped completely included Service Center processing beyond “batching”, processing of non-disaster relief transcripts, income verification express service, income verification services, among others. Most IRS headquarters and administrative functions unrelated to human safety and protection of property were also put on hold. Non-automated collections, legal counsel, information system functions, planning, research, training, and development activities.
However, with a newly updated contingency plan, 46,052 IRS employees will be recalled to work, which would constitute roughly around 57% of the total workforce, to handle the tax duties during this tax season. This will help IRS handle the influx of paperwork and queries, both upto a certain limit.
IRS recently released its tax schedule for the fiscal year 2019 and plans on accepting and processing both paper and electronic returns. It has also announced that the call sites will also be opened and it will be accepting taxpayers queries.
As per their previous announcement, tax season is supposed to start from the 28th of January. IRS also planned on releasing tax refunds despite the shutdown. You can find more relevant information on the latest tax updates on MyTaxFiler.
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