U.S. taxpayers can start filing their returns on Monday, but the Internal Revenue Service may be unable to answer questions or process returns quickly as the agency struggles to get employees back to work during the partial government shutdown.
More than half of the employees who were supposed to be back at work at the IRS’s Wage and Investment division -- the unit responsible for processing returns and answering the phone lines -- hadn’t returned as of Tuesday, said a House Democratic aide briefed on the plan.
About 5,000 of the no-shows claimed financial hardship and the IRS couldn’t reach another 9,000 employees at the first attempt. Those absences are in addition to what’s already a slimmed-down staff -- the agency is only slated to have 57 percent of its workforce during the shutdown. The IRS declined to comment.
IRS phones are being answered about 35 percent of the time after callers wait up to 40 minutes, a sign that doesn’t bode well for congressional Republicans hoping to see their 2017 tax cut law rolled out smoothly this filing season. Answering calls promptly is a problem that’s plagued the agency for years, though in 2018 there was an improvement, with calls answered within 7 to 10 minutes.
The upcoming filing season -- the first under President Donald Trump’s tax overhaul -- was always expected to be a rocky one. The IRS has been rushing to provide taxpayers and their advisers with guidance on how file. Regulations on one of the most complicated aspects -- a 20 percent deduction for business owners -- was just made final last week. Additionally, the IRS has had to update hundreds of forms and instructions.
The American Institute of Certified Public Accountants sounded a warning bell to Treasury Secretary Steven Mnuchin on Friday in a letter that warned that neither tax preparers nor taxpayers will be able to call the IRS during the filing season, and that ongoing audits are at a standstill during the shutdown.
“Once the shutdown ends, it may take months for the IRS to work through and resolve its backlog of taxpayer situations,” the letter said.
House Ways and Means Chairman Richard Neal told reporters Thursday he’s concerned that the issuance of tax refunds -- money that many people rely on to cover expenditures from the holidays -- could face delays. The IRS reversed its policy to not issue refunds during shutdowns and brought back workers who aren’t getting paid to process the payments. But the lack of workers on the job could mean the checks take longer to process than the three weeks the agency says is typical.
“People come to rely upon that stream of income,” said Neal of Massachusetts. “It’s still pretty rocky. I don’t think it’s been quite thought through yet.”
This article was provided by Bloomberg News.