By Steven Brettholtz, CPA, CFF
The IRS is now back up and running. However, the recent government shutdown had an undeniable impact on operations at the IRS. During the shutdown, the IRS suspended all audits, examinations, and appeals, except in cases where the statute of limitation was about to expire. They now need to catch up on those suspended activities while managing the busiest period of the tax calendar. IRS employees returned to work at the end of January facing a backlog of correspondence estimated at 5 million pieces. And the Tax Court has had to reschedule trial sessions canceled during the shutdown. One report estimates it will take a year for the IRS to recover.
That does not mean taxpayers should be lackadaisical about submitting their 2018 taxes. The IRS is processing 2018 returns and tax refunds and has said it will issue the first refunds this month. The agency urged taxpayers to submit their tax returns electronically for speedier processing.
What you can expect
The most common issue taxpayers may experience this season is a slower response for those needing assistance. Unfortunately, many taxpayers grappling to understand the full impact of the Tax Cut and Jobs Act (TCJA) may find long wait times at taxpayer assistance centers and helplines. In addition, the time it takes to resolve tax issues through appeals and responses to IRS action will likely be longer.
There is some speculation refunds will take longer this year, although that remains uncertain. And of course, it is possible that the government shutdown will resume if no federal funding agreement is reached by February 15. A second shutdown will cast greater uncertainty on the IRS’s speed and taxpayer assistance capabilities.
In light of these changes and challenges, we recommend taxpayers gather information necessary to prepare their taxes as soon as possible. At Myers, Brettholtz & Company, we will be working diligently with our clients to determine if deductions they’ve taken in the past are still applicable and what new deductions are now available to them. Some taxpayers who previously itemized may find that electing the standard deduction will be more beneficial this year or that they need additional documentation for certain deductions.
Here’s a short list of changes affecting individuals you should note as you begin gathering your tax documents together:
We look forward to working with our clients through another busy and successful tax season. If you are unsure about any of the revisions included in the TCJA, or are in need of tax preparation or business consulting services, don’t hesitate to call our office.
Steven Brettholtz is president of Myers, Brettholtz & Company, PA. His decades of accounting experience include numerous assignments in all phases of taxation for individuals, businesses entities and non-profit organizations. He is a member of the Florida, California, Hawaii, Nevada, New York Accountancy Societies, and the American Institute of Certified Public Accountants (AICPA).