By Kevan McLaughlin
Any American seeking resolution to a tax issue this year will need patience.
Though filing dates — March 15 for most businesses and April 15 for individuals — are unchanged and the government promised refunds will get paid on time, much of the Internal Revenue Service remains closed and unable to address outstanding issues.
Since the government shutdown furloughed all non-essential IRS employees, no one can answer phones or work on audits. Some taxpayers can’t obtain necessary documents, and certain applications and determinations are not being processed. Even when the political impasse ends, the delays will continue thanks to the growing backlog of work.
The worst problem is the delay in the adjudication process for ongoing tax disputes due to the shutdown. Neither Congress nor the President have changed the statute of limitations for such matters. Organizations and individuals are operating under a deadline to refute an IRS claim, but can’t while the agency remains closed, and may not get a proper and timely hearing.
For example, our firm currently has a case underway in which the deadline for a time-sensitive IRS dispute came and went. The IRS attempted to get more time to respond, but did not get approval before the shutdown. Our client remains unsure if the issue is admitted, denied, resolved, or open.
I don’t know the full extent of the pain that the political crisis will ultimately inflict. But I can predict the impact on tax matters, for both businesses and individuals, will be felt much longer than many anticipate —most likely throughout 2019.
I recommend business owners and individuals keep calm and seek options to prepare for a successful outcome of their IRS tax dispute when the government reopens. We could all find ourselves in limbo for a while.
As the founder of McLaughlin Legal, San Diego tax attorney Kevan P. McLaughlin focuses his practice on all aspects of Federal and California tax law, with a particular emphasis on representing taxpayers in civil and criminal tax litigation and controversy cases.
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