The Internal Revenue Service (IRS) has historically been known for significantly limiting its operations during government shutdowns. Although the IRS has not yet released its shutdown contingency plan, it is expected to follow its previous approach. The shutdowns can have detrimental effects on ordinary taxpayers, as government workers are only allowed to work if their duties directly protect the government instead of individuals. This means that taxpayers may face increased financial hardship.
During the 35-day shutdown that occurred between late 2018 and early 2019, the Taxpayer Advocate Service (TAS), which serves as the agency’s internal consumer rights watchdog, faced significant limitations. TAS employees were only permitted to open mail to search for checks payable to the government, resulting in the inability to conduct case work or help resolve taxpayer disputes, which are fundamental purposes of the service.
At the beginning of the shutdown, only around 12% of IRS employees remained on the job. As a result, they were unable to answer taxpayer phone calls, issue tax refunds, release liens and levies, or provide various other taxpayer services. However, as the shutdown continued closer to the filing season, the IRS exempted more employees and allowed thousands of staff members to return to work. This enabled them to answer phones and disburse refunds.
Overall, if the IRS follows its historical patterns, ordinary taxpayers may face significant challenges during a government shutdown, including delays in taxpayer services and difficulties in resolving disputes. The impact on individuals could be exacerbated if the shutdown occurs closer to the tax filing season, leading to potential disruptions in tax refunds and other essential services provided by the IRS.