The IRS shutdown is over. Now what?
If you think getting back to your job after a week or two of vacation is daunting, consider the unfortunate IRS employees who have returned after an involuntary 35-day absence due to the government shutdown. It’s not like the IRS commissioner just flips a light switch and everything creaks and moans back to life.
What does the shutdown mean for all the paperwork that’s piled up and all the audits that were put on hold during the shutdown?
The IRS’ basic answer is that once revenue officers, auditors, et al go through their voicemail, email and snailmail, reestablish their computer passwords and so forth and catch up on their inventory, they’ll get back to you.
While the IRS is saying all of this will take a few business days, that’s probably optimistic. It’s most likely not going to be this week.
And what about all those 30-day, 60-day and 90-day letters whose time expired during the shutdown? The IRS doesn’t say whether any of those time limits will be extended automatically, but it does specify that if you mailed documents in response to one of those letters (including petitions to the Tax Court, which was also closed) and your mail is returned to you as undeliverable, you should resend your material with a copy of the original envelope showing the timely postmark date.
As for the IRS’ main Payroll functions—audits and collections—here’s what it’s saying now.
Let’s start with the most painful process first.
- If you were in the middle of an audit, your auditor will get back to you to reschedule. You have a brief respite to better organize the documents your auditor wants you to produce.
- If you were going to send material to your auditor in response to an information document request, but thought the better of it due to the shutdown, the IRS says go ahead and mail your stuff.
- Likewise, if you received an audit report that gave you 10 days to respond, the IRS says to send any additional information to your auditor. You can also call the auditor to discuss your options.
- If you received a 30-day letter asking for your position on audit issues, the IRS advises that you call your auditor to discuss options.
The IRS’ collection machinery usually starts with an automated notice: those CP notices you may be familiar with (hopefully not, though). Computers know no shutdown, however, so the IRS’ computers continued to churn out notices. Interest and penalties continued accruing.
If you think you received an erroneous collections notice, your best bet is to turn it over to your company’s tax pro. It will take some negotiating to get the assessment abated.
According to the IRS, the shutdown didn’t affect your obligation to deposit taxes or file returns. It warns that penalties for failure to pay or file are charged from the due date of the return until the date of payment. So no leeway there.