The partial government shutdown ended on Friday, allowing the full IRS workforce to return to work on Monday, Jan. 28 — the start of tax filing season for individuals. The Further Additional Continuing Appropriations Act, 2019, H.J. Res. 28, passed by Congress and signed by President Donald Trump on Friday, funds the agency until Feb. 15.
Originally, 88% of IRS employees had been furloughed after the start of the partial government shutdown on Dec. 22. The IRS had issued a new plan in January, calling for 57% of IRS employees to work during tax season. With the closed portions of the federal government now funded for three weeks, the Office of Management and Budget (OMB) issued a memorandum on Friday, saying that all federal employees who had been furloughed “may now return to work” and that affected federal agencies should “reopen offices in a prompt and orderly manner” (OMB Memorandum M-19-09 (1/25/19)).
The IRS has not yet addressed how it will handle issues that arose during the shutdown. AICPA members reported concerns during the shutdown because IRS services and processes were not functioning at normal levels, which Annette Nellen, Esq., CPA, CGMA, the chair of the AICPA’s Tax Executive Committee, communicated in a letter to IRS Commissioner Charles Rettig and the Treasury Secretary Steven Mnuchin last week.
During the shutdown, the IRS suspended all audits, examinations, and appeal activity unless the statute of limitation was about to expire. The Service continued to send 90-day letters, and taxpayers whose examinations were suspended during this period may be assessed additional penalties and interest as a result of the delay in their case. The IRS is also facing a backlog in correspondence cases.
The AICPA asked the IRS to provide an automatic extension of notices and collection action, as well as suspend the expiration of the statute of limitation until 90 days after the end of the shutdown.
The Tax Court ceased operations during the shutdown and as of Friday had canceled upcoming trial sessions around the country through Feb. 11. On Monday morning, the court’s website announced its reopening, although it has not yet announced what will happen with the previously canceled sessions.
— Alistair Nevius, J.D., (Alistair.Nevius@aicpa-cima.com) is The Tax Adviser’s editor-in-chief. Sally Schreiber, J.D., (Sally.Schreiber@aicpa-cima.com) is a Tax Adviser senior editor.