As many readers know, the U.S. federal government closed for 35 days earlier this year, and at the time of writing another shutdown was possible. That shutdown left the IRS short-staffed. Although many IRS employees were ordered back to work and were promised back pay, a number continued to miss shifts or delay returning, citing financial hardship from missed paychecks — difficulties affording fuel, childcare, and other basic expenses were common reasons given.
This tax season was already expected to be challenging because of the sweeping tax law changes enacted for 2018, and the shutdown only made matters more difficult. The revised tax law has had ripple effects for several reasons. First, changes to withholding tables altered how much is taken out of paychecks: some analysts predict larger refunds for certain taxpayers, while others expect more taxpayers to owe when they file. Debates arose over whether penalties for underwithholding should be reduced or waived for taxpayers affected by the sudden table changes. Historically, major tax-law revisions also tend to increase the number of incorrect returns filed, which slows the IRS’s ability to process filings.
Compounding the problem, the new tax provisions were implemented quickly, and many tax professionals are still awaiting final guidance. During the shutdown, numerous cases and procedural matters were put on hold and now must be resumed. The volume of unfinished work exceeds the number of staff available to resolve it promptly, creating long backlogs and lengthy to-do lists for IRS employees.
If you had an open question with the IRS or an audit or other matter in process before the shutdown, expect longer wait times. Callers may experience extended hold periods before an agent can address their issue, and case resolutions will likely take more time than in a normal year.
For taxpayers who expect a refund and want to receive it as quickly as possible, follow two practical steps. First, file your return electronically; although many taxpayers already do this, a portion still files paper returns, which take substantially longer to process. Second, request direct deposit for any refund — electronic deposit into a bank account is the fastest and most reliable way to receive funds.
Because the tax rules changed for 2018, pay close attention if you prepare your own return. Review the updated filing instructions and withholding guidance to avoid surprises. If you work with a tax professional, ask what, if anything, you should do differently this year and whether any adjustments to withholding or estimated payments are recommended.
This article is provided for informational purposes only and is not a substitute for professional financial, tax, or legal advice. For guidance specific to your situation, consult a qualified tax professional or financial advisor.