IRS and U.S. Tax Court Announce Shutdown Contingency Plans: Operations are Limited, But Taxpayers Must Continue to File Returns, Pay Taxes and File Tax Court Petitions
Friday, October 4, 2013
The federal government may be shut down, but taxpayers must continue to file tax returns, pay taxes, and file certain other documents and petitions by the usual deadlines.
The Internal Revenue Service (IRS) and the U.S. Tax Court announced contingency plans on Oct. 1 for their operations during the government shutdown. IRS functions will be limited during the shutdown, though the underlying federal tax laws remain in effect, and taxpayers should continue to meet their tax filing and payment obligations. The Tax Court, meanwhile, canceled all trial sessions scheduled to begin after Oct. 1, 2013, suspended nearly all operations, and extended certain court-imposed deadlines; however, filing deadlines imposed by law — such as the deadline to file a petition — will not be extended during the shutdown.
According to a message on the IRS’ website, all tax deadlines remain in effect, and individuals and businesses should continue to file tax returns, pay taxes and make deposits with the IRS during the government shutdown. This includes individuals who requested an extension of time to file income tax returns, who should file their returns on or before October 15, 2013. The IRS will accept and process tax returns with payment and has urged taxpayers to file electronically, so that their returns can be processed automatically. However, the IRS will be unable to issue refunds during the shutdown. Automated IRS notices will continue to be mailed, but the IRS will not prepare or mail any paper correspondence during the shutdown.
IRS walk-in taxpayer assistance centers and live telephone customer services will be unavailable during the shutdown; however, most automated toll-free telephone hotlines will remain in operation. Taxpayers, representatives and others who have appointments related to examinations, collections, administrative appeals, or Taxpayer Advocate cases should assume their meetings are canceled. (This is consistent with our experience since Tuesday of this week. Revenue Agents are not even authorized to return phone calls.) The meetings will be rescheduled at a later date.
Overall, less than 10 percent of IRS employees remain on the job during the shutdown, and taxpayers should expect delays in many IRS functions, not only during the shutdown, but also when the government ultimately reopens.
In addition to canceling all trial sessions scheduled to begin after Oct. 1, 2013, the U.S. Tax Court announced on its website that no documents will be received by the Tax Court, the Tax Court will not receive submissions of documents for eFiling, and the Tax Court will not serve any documents during the shutdown or until further notice.
Due dates set by court rule or order for filing a document or completing discovery generally will be extended by the number of days that court operations are suspended, up to a maximum extension of five days from the date the court resumes operations (or the next succeeding day, in the event the extended due date falls on a Saturday, Sunday or legal holiday). However, the Tax Court lacks the authority to extend certain statutorily imposed filing deadlines. As a result, the deadline to file a petition with the Tax Court to redetermine a deficiency (typically 90 days from the mailing of a notice of deficiency to the taxpayer) and the deadline to review a determination involving a proposed lien or levy (typically 30 days after the mailing of the notice of determination) will not be extended.
Hand-delivery to the Tax Court is not available during the shutdown. The timeliness of a taxpayer’s mailing of a petition will be determined by the United States Postal Service’s postmark or the delivery certificate of an approved private express delivery company. Thus, during the government shutdown, it is more important than ever that taxpayers carefully preserve the records necessary to confirm the timely mailing of a petition.
Virtually no business or investment activity is free from federal and state tax considerations and pitfalls. Schiff Hardin's tax attorneys advise clients on the tax aspects of the formation, financing, operation and termination of their business activities, and in the structuring of their investments.