As of this writing, the federal government has “shut down.” While the media plays up that term, over the next few weeks there are serious consequences if a budget compromise isn’t reached. That includes furloughing about 91% of the workers at IRS.
Obviously, during a shutdown, federal prisons wont simply open their doors. Border Patrol and Customs officers will still be protecting the borders and the Defense Department simply won’t park their bombers and nuclear submarines and just lock the doors. Services such as the IRS will be severely impacted, however.
Believe it or not, there is a federal law that dictates how the federal government must act in the event of a shut down; the Anti-Deficiency Act. That law only allows federal agencies to employ personnel necessary to protect life or property. Like most federal laws, there are plenty of exceptions. One such except allows the IRS to continue to employ personnel necessary to make social security payments to the elderly and disabled.
Although the law says that government can only take actions necessary to protect life and property, the IRS says tax revenues are “property.” That means if you owe money to the IRS you don’t get a break nor an extension of filing deadlines. (If you are on extension and owe a return on October 15th, that remains your deadline. Although there might not be anyone to answer the phones come October 15th, if you are late in paying expect a bill for penalties and interest!)
So how severe will the impact be at IRS? Very!
As of September 17th, the IRS employed 94,516 employees. The IRS contingency plans defines just 8752 as necessary. That means a staff reduction of 91%.
Taxpayer Services (the telephone help line folks)? Furloughed!
Collections? Furloughed! (The IRS’ Automated Collection System will continue to spit out notices; just don’t expect a person to answer the telephone if you have a question.)
The folks at the Treasury Department are apparently optimists as their shut down plan only anticipates a shutdown of 5 days or less. If the shutdown lasts more than a week, a new plan will be necessary (although we wonder who will be left to generate such a plan.)
In 1991, I joined Maine’s state government in the middle of a shutdown. That shutdown lasted 2 weeks. notwithstanding dire predictions from the media and politicians, the state survived. It takes a toll, however, on the employees who find themselves without a paycheck and with double the work when they return. It also leads to a very frustrated taxpaying public.
Whatever you do, file and pay your returns timely.
Although we can’t help you with the furlough, we are here to help with any type tax problem. From audit defense, to unfiled FBARs and unreported foreign accounts, our team of IRS lawyers can help. We represent businesses and individuals across the United States and worldwide. If you need more information and want to talk to an experienced IRS attorney, we offer no cost consultations. All inquiries are protected by the attorney – client privilege too. For more information, contact attorney Bethany Canfield at 414-223-0464 or by email at You may also contact the author at (414) 704-6731 or by email at
Post by Brian Mahany, Esq.