The IRS Can't Take Your Questions. It Will Take Your Return
Tuesday, Oct. 15, is the filing deadline for the roughly 12 million Americans who received an extension on their 2012 taxes. And having 90 percent of its staff furloughed in the partial government shutdown doesn't mean the IRS doesn't want your money.
"The IRS is shut down, but the tax law is never shut down," says Joshua Blank, professor of tax practice and faculty director of New York University Law School's Graduate Tax Program.
One of the few things the Internal Revenue Service is actually doing right now is cashing checks — but it's not issuing them. Don't expect a refund until the government reopens. Most of the agency's other functions are also suspended.
"The IRS is not examining any tax returns for deficiencies," Blank says. "It's not conducting audits. The IRS is not answering phones to answer questions from taxpayers."
The same goes for the media. No one answers the IRS's media line, other than a recorded message about the shutdown.
A Laundry List Of Problems
So instead, I called Margaret Richardson, the former head of the IRS who was in charge during the last government shutdowns in 1995 and 1996.
This time, Richardson is watching the current shutdown from outside government. She says, "I have to confess, I'm really incredulous that it could happen again."
In the 1990s, she says, the IRS office was eerily quiet with so many workers away. There was plenty of black humor among those who remained. But that shutdown came during the holidays. It was a slow time for the agency.
Today is different. Oct.15 has become a big filing day each year.
"I think today's shutdown is potentially much more damaging since it comes as the 2012 filing season is coming to an end," Richardson says.
For those filing electronically or with simple returns, the shutdown won't get in your way, but it is causing a laundry list of other issues.
The taxpayer advocate — whose whole job is to help you solve problems at the agency — is furloughed. The same is true of the whistle-blower's office, so there's no way to report suspected fraud. If someone steals your identity and files a fake return in your name, there's no one to call.
And, after you file, the IRS typically has three years to determine whether you've paid enough tax. That clock that is still ticking, even during the shutdown.
"This actually hurts the IRS," says Blank of NYU. "They're losing time from the shot clock, and there's nothing in the statutes that allow the IRS to get back that time."
A Muddle For Accountants
If that doesn't make you sympathetic, the IRS is also currently unable to issue new levies and liens during the shutdown. But if the IRS seized your bank accounts or property by mistake, there's no one there to fix it.
All this is making life difficult for accountants.
"You just have to tell your clients, 'There's nothing we can do,' " says Michele Knight, an accountant who owns Knight Accounting and Technology in Colorado. "You have to write letters, but no one is responding to the letters. So our hands are tied, and it's beyond frustrating."
Most agree there will be more headaches when the IRS eventually reopens and starts dealing with the backlog of questions, problems and investigations.
"If you think about what happens to you when you go on vacation for a couple of weeks — you come back and you have probably hundreds of emails waiting for you, mail to open, voice mail to respond to, and it's difficult to get back to work," Blank says.
Now multiply that by more than 85,000 IRS workers, and it could take a while.
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Transcript
ROBERT SIEGEL, HOST:
And for 12 million Americans who received an extension on their taxes, today happens to be the deadline to file. With the potential for the U.S. to default on its debt in the coming days, the government will need all the revenue it can get. But as NPR's Dan Bobkoff reports, the IRS has been hit hard by the government shutdown.
DAN BOBKOFF, BYLINE: Don't celebrate yet. Just because less than a tenth of IRS workers are on the job, it's not like the IRS isn't taking your money anymore.
JOSHUA BLANK: The IRS has shut down, but the tax law is never shut down.
BOBKOFF: Joshua Blank is faculty director of NYU's graduate tax program. One of the few things the IRS is actually doing right now is cashing checks. But it's not issuing them. Don't expect a refund until the government reopens. And Blank says most of its other functions are suspended.
BLANK: The IRS is not examining any tax returns for deficiencies. It's not conducting audits. The IRS is not answering phones to answer questions from taxpayers.
BOBKOFF: Or, for that matter, from the media.
(SOUNDBITE OF RECORDING)
UNIDENTIFIED MAN: Hello. You have reached the IRS National Media Relations Office. Due to the federal government shutdown...
BOBKOFF: Right. So instead, I called the former head of the IRS, Margaret Richardson. She was in charge during the last government shutdowns in 1995 and '96.
MARGARET RICHARDSON: I have to confess I'm really incredulous that it could happen again.
BOBKOFF: Back then, she says, the IRS office was eerily quiet, with so many workers away. There was plenty of black humor among those who remained. But that shutdown came during the holidays. It was a slow time for the agency. Today is different. October 15th has become a big filing day.
RICHARDSON: I think today's shutdown is potentially much more damaging since it comes as the 2012 filing season is coming to an end.
BOBKOFF: Now, for those filing electronically or with simple returns, the shutdown won't get in your way. But it is causing a laundry list of other issues. The taxpayer advocate whose whole job is to help you solve problems at the agency is furloughed. Same with the whistleblower's office, so there's no way to report suspected fraud. If someone steals your identity and files a fake return in your name, there's no one to call. And after you filed, the IRS typically has three years to determine whether you've paid enough tax. Blank says that clock is still ticking.
BLANK: So this actually hurts the IRS. They're losing time from the shot clock, and there's nothing in the statutes that allow the IRS to get back that time.
BOBKOFF: And if that doesn't make you sympathetic, the IRS is also not able to issue new levies and liens during the shutdown. But if the IRS seized your bank accounts or property by mistake, there's no one there to fix it. All this is making life difficult for accountants like Michele Knight of Keystone, Colorado.
MICHELE KNIGHT: You just have to tell your clients there's nothing we can do. You have to write letters but nobody's responding to the letters. And we're just - our hands are tied and it's beyond frustrating.
BLANK: And Blank, like everyone I talked to, agrees there will be more headaches when the IRS someday reopens and starts dealing with a backlog of questions, problems and investigations.
If you think about what happens to you when you go on your vacation for a couple of weeks, you come back and you have probably hundreds of emails waiting for you, mail to open, voicemail to respond to. And it's difficult to get back to work.
BOBKOFF: Now imagine that's the case for more than 85,000 IRS workers. Dan Bobkoff, NPR News. Transcript provided by NPR, Copyright NPR.
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