Hyden, Miron & Foster, PLLC Law Blog

Tuesday, February 12, 2019

How Will the Government Shutdown Affect Tax Filings?

The government shutdown is frustrating for many Americans. Even for those who are not directly impacted by the shutdown as an employee working without pay or an employee who is furloughed, the negative impact of the government shutdown may be felt by all taxpayers this year as we prepare to file our income tax returns. The IRS announced it would recall thousands of unpaid workers to avoid a delay in beginning the tax filing season.  However, our Arkansas tax law attorneys suspect the government shutdown may impact some taxpayers in significant ways.
Four Ways the Government Shutdown May Affect You When Filing Your Taxes This Year

1. Delayed Tax Refunds
For individuals who rely on their income tax refunds each year to pay specific bills or make specific purchases, the government shutdown may impact them the greatest as tax refunds could be delayed. It is impossible to know exactly how long taxpayers may need to wait for their tax refunds to be issued. However, the delay in issuing tax refunds could increase as the government shutdown continues.

2.IRS Information Call Sites Are Closed

During the shutdown, IRS service centers are closed. Taxpayers may not be able to get the answers they need related to preparing and filing their tax returns for some time. It is typically difficult to get through to an IRS call site even when the government is open. After the shutdown ends, it may be even more difficult to get answers because everyone who has had to wait to prepare their tax returns until they could speak with an IRS agent will be calling the IRS at once.

3.First Year of Filings Under New Republic Tax Law

This tax year is the first year that taxpayers will be filing tax returns under the new Republican tax laws. Before the government shutdown, there were questions about how some of the laws impacted various taxpayers. The IRS was in the process of training employees on the next tax laws. The government shutdown could have a significant impact on many individuals and companies who need assistance and guidance on tax issues related to the new laws. 

Employees working to implement the Tax Cuts and Jobs Act are still working and being paid. However, the agents that answer questions for taxpayers are unavailable or may not have the answers to those questions for some time after the shutdown ends. The first filing season after changes to the tax code can be challenging. The government shutdown is expected to add to those challenges.

4. Mortgage Closings May Be Delayed

For individuals waiting to close a mortgage loan, they may be required to wait a little longer. Mortgage lenders verify past income through an IRS income tax transcript. During the government shutdown, the agency has ceased processing requests for the transcripts. Loans through the Federal Housing Administration, U.S. Department of Agriculture, or the Department of Veterans Affairs may be impacted the most.

What Can You Do if You Have Tax Questions During the Government Shutdown?

Contact the Arkansas tax lawyers at Hyden, Miron & Foster, PLLC today. Our Arkansas tax lawyers are here to help you now and throughout the year as you navigate the complexities of our tax laws.

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