The ongoing stalemate in the US Congress over how to secure a deal to agree the budget, which has resulted in a federal government shutdown, is having an impact on both the Internal Revenue Service (IRS) and the Tax Court, with many employees being put on unpaid leave until the argument between the Senate and House of Representatives is resolved.
The IRS has announced it has stopped sending out tax refunds temporarily until normal government operations resume, while the Tax Court has suspended its operations. In a statement on its website, the IRS emphasised that despite the current disruption, the underlying tax law remains in effect, and all taxpayers should continue to meet their tax obligations as normal.
The IRS statement said: 'Individuals and businesses should keep filing their tax returns and making deposits with the IRS, as they are required to do so by law. The IRS will accept and process all tax returns with payments, but will be unable to issue refunds during this time. Taxpayers are urged to file electronically, because most of these returns will be processed automatically.'
There is no live telephone customer service assistance to handle taxpayer queries, walk-in assistance centres are shut, and meetings regarding tax appeals or audits have been cancelled. While automated notices will still be mailed out, the IRS is not sending out any paper correspondence during this period. Despite this all tax deadlines, including those for payroll tax, remain in effect.
The US Tax Court took the decision to suspend operations from noon on 1 October, after which it will not be receiving submissions or serving documents. Due dates for filing which have already been agreed will be extended for the period the court is suspended. However, the court has no powers to extend statutory filing deadlines, so taxpayers who need to file a petition are advised to do so and use evidence of a postmark or delivery certificate to prove it was sent within the time limit.
The federal shutdown, the first in the US for 17 years, has arisen because the Democratic-dominated US Senate has rejected a budget bill passed by the Republican-led House of Representatives, which said it would pass the government budget only if President Obama's healthcare law were delayed a year. More than 700,000 federal government workers are currently on unpaid leave, with no guarantee of back pay once the deadlock is over.
