Economy

Delayed tax refunds? Prolonged partial government shutdown causes concern

Delayed tax refunds? Prolonged partial government shutdown causes concern

The Internal Revenue Service is one of the agencies that now lacks funding, and the US tax collector has been operating with about 1 in 8 employees under the shutdown plan it uses outside the tax-filing season.

But fear not! While the Internal Revenue Service now lacks the funds to process refunds, it is fully prepared to process tax returns that include payments to the government.

An IRS spokesperson would not speculate on how long the shutdown would have to last in order to result in a delay of refunds, CNBC reports.

Each year on April 15, tax procrastinators frantically gather paperwork and file their returns before the deadline.

There is a new concern as the partial government shutdown drags on. According to the agency, issuing tax refunds is categorized as a "non-excepted" activity, which means employees responsible for approving and writing checks are furloughed during a shutdown.

And during shutdowns, only a fraction of IRS employees work.

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As if tax season isn't enough of a headache, a partial government shutdown is making things worse.

In addition, there is a new 1040 form this year because of the new tax law that was passed just more than a year ago.

The agency's website says taxpayers "should file and pay their taxes as normal". Only 12 percent of its staff are working (without pay), mostly focused on security and technology. People in Wichita who make the trip to the IRS Tax Assistance Center will get the same message only via a sign informing visitors there will be no help until the shutdown is over.

"A lot of people count on these refunds", Jeff Olsen, Tax Partner Berndt CPA, said. You just not might get a refund, according to The Wall Street Journal.

That stalemate raises the prospect of an unprecedented extended closure during the individual income-tax filing season, which typically starts in mid-to-late January.