How the Government Shutdown Affects Taxpayers

The government shutdown has had a serious impact on taxpayers.  All Revenue Officers are furloughed, the Automated Collection Site, the Taxpayer Advocate Service and even the Tax Court are closed.

To make matters worse, the automated part of the IRS is still running.  Clients who receive notices about more serious collection by a specific date should be worried – your collection case is being accelerated by the system.

Even worse, those taxpayers who had levies issued pre-shutdown have no remedy to negotiate levy release.

All audits are cancelled//this may be a benefit to some taxpayers.  Barring fraud, IRS has a strict three years to assess and shutdown of the government does not toll the three year rule.

IRS has two years to accept or reject an Offer in compromise;  this is not tolled.  If the Offer is not responded to within the two years, it is automatically accepted.

Neither the bankruptcy timing rules nor the collection statute are tolled by the government shut down.

Perhaps the biggest impact of the Government shutdown on is the stress and uncertainty caused by the system automatically escalating collection activity, such as threatening a wage or bank levy, when it does not get a response by a required date.  Neither tax representatives nor taxpayers are able to respond because of the shutdown – and unable to predict what will happen when those deadline dates pass.

The IRS is not answering the phones.  When we call the message says “We’re sorry, due to high call volumes we cannot take your call.  Please call back another time.”  This unacceptable problem predates the government shut down;  for two months it has taken up to ten to twelve hours to even reach an IRS employee on a tax case.

photo credit: risastla via photopin cc

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