In its 17th day and entering its third week, the effects of the partial federal government shutdown are being felt both by those who work for the IRS as well as early filers who count on a tax refund. If the shutdown continues for "months or even years," what will happen?
In this post, we look at it from the perspective of an IRS employee on furlough and a taxpayer awaiting a refund. And for comparison, in 2018, the Service started accepting tax returns on January 29 and received more than 18 million returns (about 11 percent of the total returns filed) in the first week.
Employed by IRS for nearly 30 years
CNN offered a view into the lives of people effected by the shutdown. One woman has worked for the IRS for 28 years. At the beginning of January, she paid her bills with her last paycheck. She will need to start making tough decisions soon. She has considered filing for unemployment or finding a second job.
The IRS has lost significant staff over the last decade (between 2010 and 2017, the IRS lost more than 17,000 employees to budget cuts). With the shutdown and furlough of about 90 percent of its staff, it risks losing even more long-term employees who leave or decide to accelerate retirement plans.
The IRS has long been a government agency that many love to hate. Yet is impossible to get answers to new tax forms, have a lien released before completing the sale of a home or negotiate a payment plan when the agency is struggling with staffing issues.
Delay of surgery
On the other side of story are taxpayers who have made plans depending on a tax refund in the early part of the year. One man who spoke with CNN had been counting on his refund to make his insurance co-payment on a needed surgery. No tax refund means he will have to re-schedule the procedure and remain in pain.
Range of hurt
For nearly 80 percent of taxpayers who receive some type of refund, delays may range from inconvenience to falling into homelessness. For those who intend to use a refund advance to get their refund immediately, pay close attention to fees and interest terms. Often these services are much more expensive than advertised.