While the government occasionally goes through shutdown periods, few have been as controversial – and none have been as long – as the 35-day shutdown that stretched from December 22, 2018 until January 25, 2019. With the shutdown now (temporarily) at an end, the IRS is scrambling to catch up – an effort that’s being further complicated by the Tax Cuts and Jobs Act, which first takes effect this filing season. Now that the IRS’ doors are once again open for business, activities such as tax audits and IRS debt collections are beginning to resume. What should taxpayers expect, and what steps must they take to resume the process smoothly? Our IRS tax audit attorneys and CPAs are here to help guide you in the right direction.
What Happens with IRS Tax Audits After the Government Shutdown?
Below, our federal tax audit lawyers answer some commonly-asked questions about what happens to tax audits that were in progress when the shutdown began:
- Will my audit restart, now that the shutdown is over? However, it is expected to take the IRS at least several business days to process backlogged forms and messages, which means short delays should be expected.
- Will my auditor contact me, or do I need to contact them? You do not need to contact the IRS regarding your audit. Now that the shutdown is over, your auditor should contact you soon if he or she has not done so already.
- While the shutdown is an obvious exception, taxpayers should be aware that, under normal circumstances, the sudden disappearance of an auditor, abrupt termination of a seemingly in-progress audit, or inability to contact an auditor likely signals a criminal referral from the audit.
- What if I missed an IRS deadline because of the shutdown? You may have been unable to successfully submit requested materials because of the shutdown, during which auditors could not process taxpayer documents. If so, you have three options: you can (1) attempt to send the materials now, though it will take time for the IRS to get to them; (2) wait for your auditor to contact you (at which point he or she will tell you which documents are still needed); or (3) contact your auditor to ask which documents are currently needed.
How Are IRS Debt Collections Affected by the Shutdown Ending?
While revenue agents perform audits, revenue officers collect unpaid IRS tax debts. (This is not to be confused with special agents, who work for the IRS’ Criminal Investigation Division.) Revenue officers can utilize various collection strategies to recover delinquent tax debts, including assessing penalties and issuing IRS tax levies (including bank levies), in addition to reporting your unpaid debts to the three major credit bureaus. Here are a few important points to know about IRS collections after the shutdown:
- The shutdown did not “pause” penalties for filing taxes late or paying taxes late. When someone fails to file or pay taxes, he or she can be penalized and charged interest. Interest and penalties, which are applied to each full or partial month of non-filing or non-payment, continue to accumulate, up to a certain limit – regardless of a shutdown period (or, for that matter, a tax filing extension.)
- However, you won’t be penalized for missing meetings or payments because the shutdown prevented your revenue officer from working. During the shutdown, revenue officers were furloughed, placing collection procedures on hold. You will not be penalized for missing a meeting that your revenue officer was unable to attend due to the shutdown. You will also not be penalized for attempted payments, or submissions of other documents, that your revenue officer was unable to process during the shutdown. Your revenue officer should contact you shortly if he or she has not done so already. Otherwise, you may contact the IRS using the phone number provided on the most recent notice you received.
- The shutdown should also not impact in-progress installment agreements. Unfortunately, taxpayers can expect some delays while the IRS transitions back to its normal state. However, once he or she has caught up, your revenue officer should contact you about resuming installment agreement arrangements that you were in the process of making.
California Tax Audit and IRS Appeals Lawyers and CPAs
Whether you need a tax audit lawyer to represent you before the IRS during an examination, have questions about your options for paying off IRS tax debt, require IRS appeals representation to dispute an audit, or need assistance resolving a different type of California or federal tax issue, rely on the Tax Law Office of David W. Klasing. Our nationally recognized attorneys and CPAs have over 20 years of experience helping taxpayers navigate the audit process, dispute IRS errors, and obtain tax relief. Contact us online for a reduced-rate consultation, or call (800) 681-1295 to schedule your appointment.
Also, we’ve expanded our offices! In addition to our offices in Irvine and Los Angeles, the Tax Law Offices of David W. Klasing now have offices San Bernardino, Santa Barbara, Panorama City, Oxnard, San Diego, Bakersfield, San Jose, San Francisco, Oakland and Sacramento.
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