As the federal government shutdown drags on, many taxpayers are asking the big questions: “Does this mean I don’t have to file my tax return?” and “When will my refund show up?”
If only it were that simple.
1. Tax Deadlines Remain Unchanged
The lights may be off, but the deadlines are still on. If you filed for an extension earlier this year, your 2024 tax return is still due by October 15, 2025. Missing this deadline can trigger penalties of 5% per month, up to 25% of the unpaid tax.
2. IRS Operations
According to the IRS contingency plan, about 46% of employees are furloughed. The remaining half are working hard to keep our country’s tax machine sputtering along.
Here’s what’s still working (for now):
- Electronic return processing, including e-filed returns and direct deposit refunds
- Electronic payment processing
- IT security and critical systems maintenance
- Certain criminal investigations and revenue collection activities
And here’s what’s taking a nap:
- Live customer service (good luck getting someone on the phone)
- Paper return and amended return processing
- Audit and examination activities
- Taxpayer Advocate Service operations
- Appeals and most enforcement actions
- Issuance of new guidance and rulings
- Non-automated collections and compliance programs
- Power of Attorney processing
3. Refunds and Processing
If you e-filed with direct deposit, you should still receive your refund in the normal processing window of 6-8 weeks. If you asked for a paper refund, you might want to get comfortable, it could take a while under the IRS’s Zero Paper Initiative.
4. What Should You Do?
A few smart steps to take while things are up in the air:
- File electronically and request direct deposit for refunds.
- Pay taxes (including payroll tax deposits and estimated tax payments) electronically to avoid mail delays.
- Keep documentation of any IRS-related delays for potential penalty relief later.
- Do not assume leniency. Deadlines, penalties, and interest still apply.
Bottom Line
The government shutdown doesn’t pause your tax obligations – ha, if only. File and pay on time, go electronic whenever possible, and brace for slower responses from the IRS.
We will continue monitoring developments and keep you updated. Reach out to our tax accountants for questions on your specific situation.
Claire Chow – Tax Partner
References
https://home.treasury.gov/system/files/266/Treasury_IRS_Lapse_Plan.pdf
