The longest government shutdown in history is causing severe problems for federal workers and the services they provide around the country. National parks are littered with trash, TSA lines at the airports are longer than ever, and the IRS is understaffed by tens of thousands just as tax season begins. The chaos in Washington has spilled over to directly affect Community Tax clients and how we assist taxpayers in resolving problems with the IRS.
At the time this article was written, the IRS has ordered 30,000 furloughed employees to come back to work without pay. That’s still a drastically small number from the amount of people that usually staff the offices during peak tax time. While the IRS has said they will be processing returns in a normal manner, the ripple effect of the shutdown has negative consequences for taxpayers seeking resolutions that could make the 2019 tax season a painful process. Let’s take a closer look.
Stalled Tax Investigations
Before the IRS brought back furloughed workers, the government shutdown had stalled Community Tax’s efforts to collect IRS transcripts. These transcripts are a critical part of the resolution process for clients, and provide the history of a taxpayer’s account for our seasoned professionals to assess. Where do these transcripts come from? A special hotline for tax practitioners called the Practitioner Priority Service is set up specifically to assist professionals who are working as the middleman between a taxpayer and the IRS. However, during the first few weeks of the shutdown this hotline wasn’t working. Community Tax uses this hotline not only to gain access to transcripts, but also for income verification, account adjustments, and payment location.
Apart from the Practitioner Priority Service being down, the ACS collections department was stalled as well. This department is a large call center that oversees the collection of tax debts that are less than $100,000. ACS agents can contact taxpayers to review cases, issue notices, and file collections actions. Without this department, Community Tax wasn’t able to make the necessary calls to set up payment plans for our clients, lift garnishments and levies, and resolve other urgent tax matters. While they are up-and-running on minimal staff, the month delay during the shutdown didn’t allow us to take speedy action on behalf of our clients.
Fewer Employees to Staff Hotlines
The Tax Cuts and Jobs Act passed in 2018 is going to affect how you file this spring. The biggest changes come in the form of updated income tax brackets and marginal tax rates. But what exactly does that mean? The percentage that your income is taxed may have changed depending on which tax bracket you now fall into under the new laws. While working with a Community Tax professional can eliminate the need to worry about these changes on your own, many of our clients still like to stay informed about the current laws. IRS hotlines that are severely understaffed have been bombarded with questions about the changes to the 2019 tax season, creating a pool of misinformed taxpayers who don’t have access to the correct information.
Delayed Tax Returns
Despite the IRS assuring taxpayers they will receive their returns on time, the month off during the shutdown will undoubtedly delay their ability to process submitted proposals and issue refunds. Many Community Tax clients rely on their tax return to help pay down debt or put that money toward another important purchase. With the refunds potentially delayed, our valued clients could suffer significant financial hardship until the backlog of returns are able to be processed.
At this time, thousands of IRS employees are skipping work due to the extreme hardship placed on them from not receiving a paycheck for the last month. While many of the IRS services that Community Tax utilizes to find resolutions for clients are open, their ability to handle the high volume of requests and calls will likely lead to slower results for taxpayers across the nation.