The US government shut down on Dec. 22, 2018. The Rules of Thumb blog from MoneyThumb rarely gets into politics, but this IS a political issue. Donald Trump wants his border wall and refuses to budge on reopening the government until he gets it.
It is really hard when you research this topic online and try to get a handle on when the government might reopen without the reports being biased along party lines. It is a shame this is happening, and even more of a shame that so many federal workers are going without pay.
But our main concern in this blog post is how this government shutdown is affecting your accounting practice since this is your busiest time of year. Tax season is when many accountants do a large portion of their work, so we can just imagine how you are feeling right now.
So let's discuss that issue, how the government shutdown is affecting tax season, and in turn, your accounting practice. Below are 5 Ways the government shutdown is affecting tax season:
1) The IRS is not taking phone calls
This is a major problem for many accountants since you probably have questions about clients taxes you need to be answered and the only place to get your answer is from the IRS.
2) The IRS will not process paper tax returns
The IRS is not processing paper returns, as they require manual effort. They are, however, allowing e-filed returns.
3) Delay in Refunds
The IRS will be processing refunds starting on the early filing date of January 28th.
IRS confirms filing season opens January 28, and refunds will be issued even if the shutdown continues.
4) No processing of amended returns
5) The Taxpayer Advocate is shut down
Unfortunately, the Taxpayer Advocate Service is a casualty of the shutdown. Basically, they are a watchdog over the IRS of sorts, as well as advocate for taxpayers who might be in precarious situations.
The bottom line
The bottom line is that it’s not an unmitigated disaster…yet. We are still able to e-file returns, which covers the majority of tax returns. Most years, a lot of people receive refunds, but this year withholding is an issue due to the Tax Cuts and Jobs Act (TCJA) resulting in an expectation that more people might owe the IRS than normal. Finally, we are still waiting for a lot of the final regulations from the IRS regarding the implementation of the TCJA, and it seems the Shutdown will slow the progress of their effort to get that out to preparers and payers.
The Rules of Thumb blog from MoneyThumb would really like to hear of other ways this government shutdown is affecting your accounting practice and discuss the ones we have listed above. Leave us a comment below, or share this post on your social media page and let's discuss this issue together. We will be sharing the post on our Facebook, Twitter, Google Plus, Pinterest, and LinkedIn pages. We'd love to hear your input on at least one of those places.