The IRS Is Shut-Down With Only A 5-Day Plan -- We're On Day 3

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The IRS is a well-greased tax-machine and politicians have voluntarily decided to shut it down to “play chicken” with our livelihoods.  This is a good-news and bad-news situation, so let’s go over the IRS’ shutdown plan:

Facts

• The IRS shutdown begins October 1^st, 2013.
• Only 9.3% or 8,752 of the IRS employees will be employed (90.3% or 85,764 employees suspended).
• This is the IRS’ 61 page plan for the first 5 days of the government shutdown.

Good-News

• Tax Returns are still being processed.  This is great for everyone with tax refunds because at least the refund will be waiting to be sent out, when everyone returns to work.
• Tax Audits are suspended.

Bad-News

• Tax Refunds are not going to be processed during the shutdown.  Your returns are going to be processed, but your tax refunds aren’t going anywhere.
• All support centers are shutdown.  This includes the call centers that answer our questions.
• Liens, levies and seizure cases will continue.  Taxpayers that have already been audited and with cases that has gone into collections will still have their property taken.
• The Whistleblower’s and Taxpayer’s Advocates Offices are both closed.

Implications

• If you’re worried about that IRS letter or notice that you received – don’t worry.  The IRS knows that you’re not going to be able to reach them, so all audits, letters and notices are going to be rescheduled.
• The best way to answer a letter or IRS issue is to send a letter by certified mail.  The IRS has shut down all support services, so you won’t be able to reach an agent or service operator.  Sending a written letter by certified mail will allow you to move your case forward and have proof.

What Happens After the 5^th Day?

• The IRS won’t explode and disappear.
• The plan they have in place is solid and can be used for an extend period of time.  Luckily for the IRS and Americans, October 15^this the last major deadline of the year.  Thus, the IRS can afford to maintain the minimum staffing required under the current plan.  But, this is only true until December (2 months).  This is because the new year is the beginning of the tax season, where businesses start to file the numerous tax returns required.

  As seen from thinkprogress.org

The last point I think everyone should be reminded of is that the government shutdown extends beyond the IRS.  The last time we went through this rodeo, the negative effect on our economy was worse than when Lehman Brothers fell in 2008.  This political knife fight might cause of all of us to have to file some sad looking tax returns next year.