In a letter to Treasury Secretary Steven T. Mnuchin and IRS Commissioner Charles Rettig dated January 11, 2019, Ranking Member of the Senate Finance Committee Ron Wyden (D-OR) expressed his concern on how an extended government shutdown will affect the 2019 tax filing season and the ability of the IRS to process tax returns and issue timely refunds.
Wyden noted that in conversations with the IRS and Treasury, he has been informed that the Trump Administration believes it has the legal authority to summon IRS employees back to work without pay to process taxpayers’ tax returns and issue tax refunds. Further, it was indicated that a revised IRS shutdown contingency plan was expected to be released soon.
Senator Wyden posed the following questions for the IRS:
…Will taxpayers’ refunds be delayed as a result of the shutdown? If so, by how many days or weeks on average?
…Will the IRS be able to hire seasonal employees to help with the timely processing of tax returns? If not, or if the shutdown limits how many seasonal employees IRS can hire, what measures will be taken to ensure delays do not occur?
…Will the IRS be able to process paper returns and issue tax refunds without a delay for taxpayers, like seniors and low-income families, without access to electronic filing?
…Will taxpayers who require the IRS call assistance to complete their returns get to speak to a live person to have their questions answered in a timely way?
…Is there increased risk of taxpayer identity theft if the IRS tries to maintain normal operations during a shutdown? For example, if the IRS is working with a skeleton staff as a result of the shutdown, is there an elevated risk that cyber criminals filing fraudulent returns with stolen taxpayer identities will be able to steal taxpayers’ refunds? Will the IRS be able to detect, let alone thwart, these fraudulent attempts?
…What about fraudulent tax return preparers who attempt to over-claim tax benefits on behalf of their clients? Or unscrupulous preparers who attempt to charge their clients usurious rates of interest in return for receiving their tax refunds right away? Will the shutdown hurt the IRS efforts to police such practices?
…Will the IRS continue to send automatic computer-generated collection and audit notices to taxpayers? How will the IRS alleviate the concerns of taxpayers who have responded to collection and audit notices but, due to the shutdown, not received any notification from the IRS? Further, how will the IRS adjust the deadlines imposed on taxpayers for responding to collection and audit notices, to ensure taxpayers are not penalized only because the shutdown is preventing the IRS from processing their responses?
