The IRS is operating as normal today, the 2nd of October, despite the government “shutdown” that began yesterday.
This is because it has funds set aside by the Inflation Reduction Act that will keep everyone at work for at least five (5) business days i.e. October 7.
If the shutdown continues past the 7th, as many think it may, there will be some risks to for those with un-resolved issues.
PENALTY AND INTEREST ACCRUAL
Penalty that hasn’t fully been applied, and interest each continue to add to the underlying debt despite the fact that the IRS may not be fully functioning. The IRS isn’t going to place a hold on this despite the fact that resolution may not be available. If making payments toward the debt online, that should remain available.
IRS ASSISTANCE RELATED TO RESOLVING COLLECTION ISSUES
This can be a difficult problem. Phone support, payment plan negotiation, levy release etc. may not be easily available. In shutdowns past we’ve seen the IRS issue wage garnishments prior to the shutdown and then be unable to provide any assistance to stop the garnishment. If you have a potential collection issue, now may be a good time to try and solve it even if with a short term solution.
POST – SHUTDOWN “TRAFFIC” JAM
After the shutdown ends, the IRS may speed up collection efforts to try and remove it’s backlog. If someone has a tax debt issue and is susceptible to levy etc. they should try and ensure they resolved the issue as soon as the “doors” open.
IF you have IRS debt and are concerned about the IRS taking action, try to find out quickly what the status is and attempt to solve the situation, even if the solution is short term. You won’t want to wake up to a frozen account or wage levy at work and no way to resolve it.