Shutdown Brings Chaos To The IRS And May Delay Refunds

Americans are used to procrastinating when it comes to filing their taxes. This year, tax season is expected to see an even bigger delay—thanks to the government shutdown. 

The Internal Revenue Service is one of the many agencies shut down since Dec. 22. Only 12 percent of its staff are working (without pay), mostly focused on security and technology. The agency is not issuing refunds, updating tax forms or answering phone help lines, according to its shutdown plans.

That's making tax professionals fret as they anticipate a shorter window in which to file. That's on top of an already complicated tax season, due to the myriad of new regulations ushered in by 2017's sweeping tax reform bill, the Tax Cuts and Jobs Act. 

"When I look in my tax software, which is professional tax software, there are many forms that haven't been finalized," said Steven Zelin, a CPA based in Manhattan. "We can't file. And since the tax law changed so much there's a likelihood that there's maybe a delay" in starting the filing season, he added.

But those hoping that an IRS shutdown means a breather on their taxes will be disappointed. The agency's website says taxpayers "should file and pay their taxes as normal."

The problem is, there's not really a "normal" for this time period, which comes at the end of the IRS's yearly closure as well as the tax code overhaul.

The IRS typically shuts down from November through the end of the year to update its systems with annual tax changes, according to tax professionals. That includes many tax forms, which make the basis of calculations done by tax software, both professional software and programs used by consumers.

In the last two years, the IRS has announced on Jan. 4 or 5 the date that e-filing season would begin, usually in the second or third week of January. As of Friday, it's unclear when filing season begins. The IRS wasn't immediately available for comment.