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The Government Shutdown Effect On Your Taxes


Just because the government isn't running, doesn't mean taxes - or other IRS issues - disappear.

If you haven’t heard yet, the government recently shut down. I know, a big shocker considering no one could come to a decision on what kind of budget they should handle. Regardless of how you feel about the budget or whose side you’re on though, there are just as many other pressing issues that either have an impact on you now, or could very soon have one. And it all has to do with the IRS and your tax payments.

Currently, somewhere around 90 percent of the IRS' employees have been relieved of their duties, because of the shutdown. This means, many of the previous services that the IRS supplied to people are suspended until we have a government again. For many people that may not seem like much of an issue until January 2014 rolls back around, but actually the shutdown occurred right when all the people who asked for extensions would be handing in their tax returns.

This doesn’t mean those people suddenly don’t have to pay their taxes though. In fact there seems to be a lot of major confusion about what the government shutdown means for your taxes in general, and this confusion could only get worse the longer the shutdown goes on.

Payments Are Still Required

No matter what happens with the government, their budget, and the shutdown, you are always required to pay your taxes. It is in fact a law (known as a tax code) that can still be reinforced and will be if you don’t pay them. This means if you asked for an extension on your 2013 taxes, you do owe them come Oct. 15. However, just because you owe taxes, does not mean the government has to refund you for any extra taxes you paid beyond what you needed to.

While the shutdown is in effect, there won’t be any tax refunds going on - whether from a late return being filed or one come 2014, you’ll pay your taxes and that’s it. There still hasn’t been any word on whether the back log produced from the nearly 12 million people filing their extended tax returns will be resolved and given their tax refund if they had one, come a time when the shutdown isn’t in effect. But the IRS has mentioned that when the government reopens they will be resuming the providing of refunds, it is just unclear as to whether they will continue from whereever they left off or start with whatever they freshly get in.

The Laws and Enforcements

All tax laws are still thoroughly enforced and you are required to obey them. If you were currently involved with a criminal case with the IRS, it will continue, and if you have done something wrong and it was discovered, it will still be legally resolved. There is only one exception to this due to the sheer numbers that the IRS no longer has: Audits. Even if you were in the middle of an audit, they have all been suspended. No new audits or current audits will be handled until the government continues again.

We have received word as to what will happen with the audits: They will pick up right where they left off when the shutdown ends, which means unless you want to be audited at a future date you should avoid doing anything ridiculous with your filing now.

Assistance has beenHalted

For the most part another area that has been shut down with the government comes in the form of the customer service the IRS presented. This includes any live people you might speak with on the phone. There are only two places that the IRS still offers help. Those two areas are the automated phone system, where you are handled by a robot voice, and the IRS website, which offers plenty of information, videos, FAQs and so on to hopefully resolve your questions.

Unfortunately for unique situations, that means many more people will have to be turning to outside tax assistance resources for the time being. This could cause a major influx in January and we are still in a shutdown as the entire previous IRS staff that handled hundreds of calls a day is no longer working.

It’s clear that when the government re-opens there are going to be just as many issues as there were when it closed, with many government employees playing catch-up and possibly many of them having to look for new jobs since their current leave provides no pay. This could make the 2014 tax season impossibly more frustrating for everyone involved even if the government was no longer closed tomorrow.

Hopefully this will resolve quickly enough, and it’s best to note that the IRS and the employees that are still left picking up the pieces are not to be blamed for this, they are just trying to do their job as best as they can. How would you feel if you suddenly had to take on the duties of three of your other employees while continuing your own? That’s how thin the IRS has been stretched with this shutdown, and we are all feeling it.

If you have any questions or had the six-month tax extension for this year, it’s highly recommended that you take a look at the IRS site to get more information. If your questions can’t be answered from that then turn to outside specialists and sources.

Feature Photo Credit: Getty Images

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