06 Mar Refunds and Returns – How a Government Shutdown Affects Tax Season?
With the recent government shutdown that lasted for well over a month, we were reminded once again how the US could falter easily when the government can’t reach an agreement.
The shutdown is now over after affecting many, and it did so for 35 straight days, making it the longest one in US history. However, even though it’s over, we can’t know when another one will occur. Only a year has passed since the last one, and before that, it happened in 2013.
Without any way of knowing when the next shutdown will occur, it would be good for you to see how a closure affects the tax season, but more importantly refunds and returns.
What Happened This Shutdown?
This shutdown was harsh on the employees working for the government without pay, but a big part of them, including the agencies they work for, strived to keep everything going smoothly as much as possible.
Many were fearful what would happen if the IRS didn’t work, but the Trump administration managed to keep tax refunds and returns going, i.e., the paperwork and filings processed by IRS workers before the tax season started. Additionally, the IRS prepared an entire contingency plan to get everyone’s money to them on time.
Employees had to work without pay, but if the shutdown continued for longer than it did, we probably would have seen worse outcomes.
In addition to all of that, there are new laws that are only now taking effect. The IRS had to postpone implementing and testing parts of them because of this shutdown, and if it had lasted for longer, it might have been much worse for the new tax code.
The problem here is that there’s no way of knowing how bad it can get during a government shutdown, and the longer it lasts, the more problematic it can get as many workers won’t work at all when not paid on time.
What Can Happen During a Shutdown?
In the past, the government would retain a considerable part of the workforce during the shutdown, to ensure that the most vital operations keep going. This time, this essential personnel included IRS workers as well, but there’s no way of knowing how the next shutdown will go.
It might be even longer than this one, and like before, it might not include the keeping of vital IRS staff to process your refunds and returns.
Besides that, even if it did keep a big part of the workforce, they would still be understaffed, and thus a lot of what needs to be done might end up being half done or not done at all. And if you end up needing assistance, it’s unlikely that you would get any as the helpline would not be working either.
With all of that, it’s vital to be prepared for your tax refunds and returns not to go according to plan and the way they usually do.