Memo – The Government Shutdown and Your Taxes

Already have questions? Call me on (732) 673-0510.

I prepared this memo because I’ve been getting inundated with phone calls and emails related to the federal government shutdown, especially as it relates to the IRS.

So how, exactly, is the government shutdown affecting you and your income taxes?

1. IRS offices are closed.
2. Only 12 percent of its other staff are working, without pay, mostly focused on security and technology.
3. The IRS is not issuing refunds, and when the shutdown is over, the timeframes for the issuance of refunds will be elongated.
4. The IRS is not updating tax forms.
5. The IRS is not answering phone help lines.
6. 99% of IRS audits have now been put on hold.
7. Transcripts for loans are not available. This is severely impacting home buyers who might need proof of income for their home-loan applications. Lenders typically require a transcript, applied for using IRS Form 4506-T, which verifies income for potential home buyers. Under a government shutdown, the only transcripts the IRS will issue are those related to disaster relief efforts, according to the IRS contingency plan.

Usually at this point, we are able to electronically file tax returns for the most recently ended year. In this case, that would be 2018. We do not have any idea when we will be able to electronically file 2018 returns. The government shutdown, even if it was suddenly resolved, would still leave us weeks away most likely from being able to electronically file any returns.

So yes, this does mean that there will be an abridged, or shortened filing season.

The IRS did have a contingency plan for a shutdown, but it only went through December 31st 2018! I don’t think any of us are surprised about that!

But anyone interested, can read that IRS contingency plan HERE.

The most important thing to remember is that you shouldn’t delay gathering your 2018 tax information as usual.

We are fully capable, here at The firm of Chris Whalen CPA, too prepare, calculate and finalize your 2018 returns.

All 2018 income tax preparation software has been fully loaded and tested. That is for your personal returns as well as your business returns. Once the electronic filing system is put online, we can then get your returns filed at that time.

Any of you that have heard me speak in the past, have heard me warn against tax preparers or CPAs, who are inputting your data onto cloud-storage based systems. I feel this is incredibly dangerous and this opens you up to Identity Theft.

My firm uses very sophisticated software that does not rely on any online system or the internet and most importantly, we do not keep any of your income tax data in the cloud.

As most of you will be talking to your tax preparers very soon, please tell them that you do not want your personal financial and income tax data input into the cloud. Ask them if they are still storing all of your prior years’ tax return data online also. Again, do not allow your tax preparer to put your family’s most sensitive financial data in the cloud. Demand that they use software that allows them to keep your data on local secure servers in their offices.

The systems in my office keep your data stored safely exactly that way. Locally, meaning in my office, on secure servers. Even if the internet was down, and the government shutdown is prolonged, we can still process your tax returns and get them ready for submission.

My team is keeping abreast of all government shutdown news on a moment-to-moment basis so you don’t have to. 

Questions? Concerns? Call me on (732) 673-0510.

Get my memos in your inbox by clicking here —> http://eepurl.com/7rJdT

Click here to request a consultation or ask me a question.