Update: The IRS, 2018 1040s and the shutdown

The IRS has announced that taxpayers may begin filing their 2018 1040s on Monday, Jan. 28, 2019, government shutdown or no government shutdown. That’s a neat trick since you’re not even required to provide employees with copies of their 2018 W-2s until Thursday, Jan. 31.

What the IRS will do

Jan. 31 is also the day you must file your fourth-quarter 2018 Form 941, and annual Forms 940, 945 (if you withheld income taxes from nonpayroll items), 1099-MISC (if you’re reporting payments in Box 7 to independent contractors) and last, but certainly not least, your W-2s.

According to the IRS’ lapse contingency plan, which it updated on Jan. 15, 57.4% of its employees will be recalled from shutdown-related furloughs. Some of these employees will be opening mail, so, assuming the shutdown continues through Jan. 31, don’t forget your filing responsibilities.

In addition, the contingency plan notes that the IRS will pay tax refunds and continue to issue guidance under the Tax Cuts and Jobs Act, some of which is needed for taxpayers to file their 2018 1040s.

Payroll Handbook D

What the IRS cannot do

There are, however, bunches of things the IRS can’t do right now. And if you need these services, you should adjust your expectations accordingly.

  • The IRS is receiving snail mail, but responses will be few and far between. If you mailed something during the shutdown, expect a lengthy delay for a response.
  • These are off, for the time being. Tip: If you’re currently undergoing an audit, use this pause wisely. Ensure that your payroll records are in a useable format for the auditors and discuss your audit strategy with other relevant department heads.
  • Collection activities are off, too, except for automated collections.
  • Criminal enforcement. No breaks here; criminal investigations continue, despite the shutdown.
  • Tax-exempt organizations. The IRS isn’t processing applications or determinations for tax-exempt status or pension plans.