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US government shutdown freezes IRS services

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The shutdown of the US government has brought a freeze to the Internal Revenue Service (IRS).

The cause of the shutdown is a stalemate between President Donald Trump and Democrats over Trump’s insistence on raising $5,6 billion to build a wall to keep out illegal immigrants streaming in from the southern border with Mexico.

Trump has threatened to keep the US government shut for months or years unless the Democrats assented to funding for the wall.

EWN reports that around 800,000 US public workers have been unpaid, with about a quarter of the federal government now closed for two weeks.

Accountancy Daily reports that taxpayers face delays as the IRS suspended all non-essential work due to the shutdown. This is particularly disruptive as it comes at the start of the tax filing season.

During the shutdown, a suspension of funding means that US government departments are only able to carry out actions ‘necessary for the safety of human life or protection of government property’.

In the case of the IRS this means that 12.5% of its usual workforce is employed, carrying out essential tasks such as processing electronic returns, appeals, criminal law enforcement and investigations.

However, many non-essential tasks are suspended indefinitely, including issuing refunds, conducting audits, return examinations, and non-automated collections. US citizens seeking refunds for years prior to 2018 are particularly at risk, as are those expecting outcomes of investigations.

It also means that telephone customer service assistance for handling taxpayer queries is suspended and walk-in assistance centres are shut. All current tax deadlines, including those for payroll tax, remain in effect.

The IRS’ contingency plans cover just five business days, which lapsed on 31 December 2018. As the shutdown continues, the agency will either demand that workers return from the enforced furlough or enact further, unplanned emergency measures.

The Democrat-led House of Representatives passed two measures on 3 January 2019 in a bid to reopen government agencies whose funding had lapsed, but provided no money for the disputed $5.6bn ($4.2bn) border wall demanded by the president. The Senate, which is controlled by the Republican party, has vowed not to bring them up for a vote because they do not pass muster with the president.

In 2013, a dispute over a healthcare bill led to a suspension of government activity for 16 days. As a result the IRS moved its filing season for accepting and processing 2013 individual tax returns to start on 28 January 2014.