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How did the shutdown hurt taxpayers?

Imagine needing to talk to an actual person at the IRS to stop the pending seizure of your savings. For roughly three weeks, no one answered the phones. The Service was, however, still working tax collection cases.

If you start working on your taxes in the next couple weeks and have a question, consider this: Only 48 percent of people who called reached a live person. This is drastic change considering that 86 percent of people who called for assistance during the 2018 tax season got it.

Taxpayer advocate reports to Congress

The Wall Street Journal detailed numbers that show taxpayers were harmed by the shutdown. Nina Olson, the National Taxpayer Advocate wrote that the “these numbers [including much longer hold times] translate into real harm to real taxpayers.”

The IRS continued sending out tax due notices, but it was virtually impossible for anyone to get the information to respond during the shutdown. Some who sought to challenge an assessment in tax court received their petition back from the court. Meanwhile, enforcement efforts continued even if the law required suspending these activities while a court case was pending.

Ms. Olson continued, “It is unconscionable for the government to allow its employees to enforce collection of taxes without the concomitant taxpayers rights protections enacted by Congress.” And the end of the shutdown is not the end of the story. Service workers came back to a backlog of 5 million pieces of correspondence. It would take some time to respond even if they were not also processing returns during tax season.

Implementing reforms enacted in 2017

Adding to the difficulties: This is the first filing season with new forms, rules and changes to deductions and exemptions. The newly revised 1040 form has numerous backup schedules that could be missed and may lead to errors.

For those looking for guidance on the new 20 percent passthrough entity rules patience may be required. New rules are not always clear, which could also cause more litigation over what provisions actually mean.

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