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Will the shutdown affect the 2019 tax season?

The short answer is yes it will likely have an impact. The IRS has a workforce of almost 78,000 employees. Only about 10,000 of those are “excepted” from furlough.

With the timing of the shutdown over the two holiday weeks, the good news is that some employees would have already been out of the office. The IRS had recently completed a contingency plan detailing which employees were considered essential.

Two immediate noticeable changes

Notifying the IRS of a power of attorney designation with a Form 2848 cannot currently be completed by fax. The unit shut down its machine. An alternative option may be to send the form in the mail and then fax it when the shutdown ends.

The Tax Court also posted a shutdown notice on its website until further notice. What happens to previously scheduled hearings later in the month is uncertain.

Designated Priorities

Keep preparing for tax season does make the list, but it is not the first. Opening the mail, cashing checks and protecting collections and assessments from expiring statute of limitations are higher up. A December Procedurally Taxing blog provides a closer look at each of the IRS units and how they are affected.

Generally, the Service breaks essential employees into three categories. The first are those in positions not funded by annual appropriations. The second are those that do things “necessary for the safety of human life or protection of government property.” IT employees testing upcoming filing year programs and administrative employees who process batch paper returns are included in this one. The third category are employees who focused on an orderly closedown.

One unit not affected was IRS Criminal Investigations. In a 2011 shutdown, it became apparent that the current caseload could not be handled during a 50 percent staffing reduction. Since, the contingency plan was updated and all the 2,745 employees continue their work.

As the government shutdown extends into 2019 with few signs that the end is near, we will continue to provide tax-related updates.

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