For­get tax re­funds: IRS open for de­posits only

The Washington Times Weekly - - Politics - BY JAC­QUE­LINE KLI­MAS AND STEPHEN DINAN

The IRS is still col­lect­ing taxes dur­ing the gov­ern­ment shut­down, but it isn’t send­ing re­funds — and it also has stopped com­ply­ing with a sub­poena to turn over doc­u­ments to mem­bers of Congress who are in­ves­ti­gat­ing the agency’s tar­get­ing of tea party groups.

The House Over­sight and Gov­ern­ment Re­form Com­mit­tee and the House Ways and Means Com­mit­tee have stopped get­ting doc­u­ments from the In­ter­nal Rev­enue Ser­vice.

“The IRS has in­di­cated to the com­mit­tee that their fur­lough de­ci­sions will af­fect the agency’s re­spon­sive­ness to com­mit­tee re­quests, in­clud­ing the out­stand­ing sub­poena,” said Ali Ah­mad, a spokesman for the over­sight com­mit­tee.

The gov­ern­ment shut­down, which be­gan Tues­day morn­ing, has kept home an es­ti­mated 800,000 fed­eral em­ploy­ees, in­clud­ing more than 85,000 who work for the IRS, ac­cord­ing to the agency’s con­tin­gency plan. That leaves slightly more than 9 per­cent of the IRS staff on the job.

That is too few to process re­funds but does not let tax­pay­ers out of their obli­ga­tions.

“In­di­vid­u­als and busi­nesses should keep fil­ing their tax re­turns and mak­ing de­posits with the IRS, as they are re­quired to do so by law,” the agency said in its guid­ance for tax­pay­ers. “The IRS will ac­cept and process all tax re­turns with pay­ments, but will be un­able to is­sue re­funds dur­ing this time.”

An im­por­tant dead­line is loom­ing: Tax­pay­ers who re­quested a six-month ex­ten­sion on their 2012 re­turns are still re­quired to file by Oct. 15. The agency said all other dead­lines re­main in ef­fect.

Ed­ward Karl, vice pres­i­dent of tax­a­tion for the Amer­i­can In­sti­tute of CPAs, es­ti­mated that 6 mil­lion to 7 mil­lion peo­ple have filed for ex­ten­sions and are fac­ing that dead­line this year. Al­though the per­cent­age is small — about 120 mil­lion 1040 forms are filed each year — a lot of peo­ple may have ques­tions with nowhere to turn.

“There will have to be some kind of a process, and they might han­dle that on a case-by-case ba­sis. They tend to be rea­son­able on th­ese types of things where they may not give blan­ket relief but they will no­tify their staff of pos­si­ble one-off sit­u­a­tions where peo­ple need to be a lit­tle bit more le­nient,” Mr. Karl said, though he would not spec­u­late about a sit­u­a­tion that would war­rant le­niency.

While the IRS will not be open to an­swer ac­count-re­lated ques­tions, Mr. Karl said, CPAs are a good re­source for peo­ple with ques­tions. He said some may have to file in­com­plete re­turns and amend them once ques­tions can be an­swered.

The IRS has re­leased its shut­down plan and has in­for­ma­tion for tax­pay­ers on its web­site, but Mr. Karl said he ex­pects the agency to is­sue more in­for­ma­tion if the shut­down con­tin­ues and looks like it will over­lap with the Oct. 15 fil­ing dead­line.

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