October 21, 2013

Before last Thursday when President Obama signed the bill to reopen the government and end the shutdown, hundreds of thousands of IRS employees were left hanging. No work, no pay, and none on the way. Although the hiatus made life easier for taxpayers at risk for audits, the rest of the nation had to deal with automated voice message systems, delayed refunds, and virtually no help from the IRS on tax inquiries.

The Internal Revenue Service, in response to the government shutdown, had announced on their official site the cessation of taxes and liens during the duration of the hiatus. However, the automated system that was set up in advance, delivering action notices and deadlines to taxpayers and lien holders created quite the stir, with concerned citizens wondering what to do when the messages didn’t line up.

To address this concern, the IRS clarified that the notifications in question were already set up to be sent out automatically before the official October shutdown occurred, and citizens that received said notices should not panic, but should be advised of the automated process lag time. Confusion still persists as the IRS previously on their webpage proclaimed that no liens and taxes would be sent… yet the same page suggests that the IRS would, in fact, continue to create and send invoices and notices of a broad range. The IRS explained these seeming contradictions in a statement:

The IRS emphasizes that these notices are not actual levies or liens; just a notification of potential future action. – IRS.gov

Citizens should have all taken a collected (pun intended) sigh of relief.

Handling Enforcement

Regarding whether or not the IRS and its employees handling the enforcement and collection of taxes and liens during the shutdown would continue collecting, the IRS stated that, “In non-criminal cases, the only enforcement actions the IRS is taking during the appropriations lapse involve isolated instances where we need to take immediate action to protect the government’s interest.” They continued their explanation by further detailing this category of criteria as being:

Any enforcement action in this category—such as seizures—would be extremely limited. For example, where the expiration of the statute of limitations on collection action is imminent. For criminal issues, most IRS Criminal Investigation employees continue to work during this period, similar to other federal law-enforcement agencies. – IRS.gov

Show Me the Money

As far as tax filing and tax returns go, many wondered what protocol to follow amid the hullabaloo of government hiatus. The IRS instructed taxpayers to continue to file as usual, noting that the United States Postal Service, as well as the intake system, could and would still be in operation and able to process their refunds. The postmark date would then serve as evidence that the filing was timely.

However, the IRS warned the citizens to be aware that, although legally and officially received, filed and processed in due time by the taxpayer, the actual payments due wouldn’t be able to be sent out while the shutdown persisted. In essence, taxpayers would have all their I’s dotted and T’s crossed, yet no sign of actual green until the government revved up its engines again. To the people of the nation, they may as well have said “buckle up and fasten those seat belts, it may be a long and bumpy ride.”

Shutdown Ends, IRS Reopens

Now that the shutdown is over, it’s clear by the IRS’ website that they still don’t want people calling in and asking for help. “The IRS encourages taxpayers to wait to call or visit if their issue is not urgent, and to continue to use automated applications on the IRS website.” People who have been waiting weeks to get their questions answered will most likely have to continue holding their horses due to high phone call volume, and increased foot traffic in local offices. Not only that, the backlog of unanswered correspondences will keep things delayed even longer.

Hopefully the IRS takes the disgruntled taxpayers, employees, and this entire experience as a lesson in case this happens again next February, when the latest deal is set to expire.

Photo: Wikipedia