IRS would suffer significant disruptions if the shutdown were prolonged
Millions of Americans who sought a tax extension this year could be in for a world of hurt from the IRS if the government shutdown is extended beyond a week or so. Almost 19 million taxpayers who require extra time to complete 2024 returns must do so by October 15, and an extended budget shortfall may make it difficult to file returns, get help, or resolve something with the tax agency.
Most IRS operations are expected to persevere through October 7, but starting October 8, the agency might swing into a more critical level of its shutdown contingency plan and shut down nearly all non-essential operations. That means sparse personnel, reduced access to IRS resources, and potential delays in processing returns.
During previous shutdowns, tax filers encountered severe issues, including not being able to contact the IRS, experiencing difficulties paying electronically, and being held up in handling paperwork or disputes. Specialists indicate that individuals who are relying on the extended October filing period are particularly at risk this year.
Why this matters to you
If you’re one of the taxpayers who didn’t finish your return in April or needed extra time due to events like natural disasters (for example, the early-2024 California wildfires), the shutdown could directly impact your ability to file and receive any refunds on time.
The last time, taxpayers were unable to file and receive help from IRS staff,” wrote the American Institute of CPAs (AICPA) in a letter to the IRS. “Those relying on the October 15 deadline can be expected to face the same problem if the funding is not restored on a timely basis.”
Some specific problems taxpayers can anticipate if the shutdown continues beyond October 7 are:
- You do not have the ability to call IRS agents to ask questions about your tax return.
- The IRS website is experiencing disruptions, which are preventing online payments and e-filing.
- I’m having trouble resolving disagreements, risking penalties or automated collection notices.
- There is minimal support for identity theft victims or taxpayers in distress.
Contingency plan limitations
The IRS does have a shutdown contingency plan in place, where the agency can continue most activities for five business days on reserve funding. That runs out at 12:01 a.m. ET on Wednesday, Oct. 8, in this case. After that point, most of the IRS would basically be shut down to non-essential functions, and taxpayers would not have the crucial assistance they need for filing and communication.
Congress remains gridlocked over government spending and health care cuts, with no solution in sight. If the shutdown lasts past the October 15 deadline for extending the government shutdown, millions of Americans will be affected, with refunds delayed, responses to questions slowed, and general confusion in a time-sensitive filing season.
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Who could be most affected
- Extended filers: Those who filed a request for extension to file by October 15, such as victims of disaster.
- Individuals requiring IRS assistance: Those who seek answers to forms, payment, or tax law issues.
- Identity theft or hardship cases: Taxpayers that require special handling by the IRS for sensitive or emergency cases.
- Electronic filers: Those that rely on online submission may experience websites crashing or processing delays.
What you can do
In case you are taking the extension to file, tax experts advise filing at the earliest convenience before October 8. This reduces the likelihood of encountering shutdown-related delays and permits any issues to be ironed out when the IRS still has active staff.
For taxpayers who are unable to file early, it is necessary to track official IRS announcements, look for online postings about the status of systems, and remain informed that delays might impact refunds, payment processing, and mailings.
The ongoing government shutdown shows so vividly how deeply federal funding affects average Americans — especially during prime tax times. Millions of extended filers now hope nervously that Congress will act quickly to avoid another series of fiascos that have them waiting in the dark and possibly penalised.
