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IRS calling back half its employees to process returns and issue taxpayer refunds

IRS HQ WDC by Kari Bluff via Flickr CC
IRS headquarters image by Kari Bluff via Flickr Creative Commons

The Internal Revenue Service has some good news for taxpayers and sort of good news for its staff.

The agency is calling back more than half — specifically, 46,052 or almost 55 percent of its more than 80, 265 — employees.

These are workers who, according to the updated government shutdown contingency plan issued Jan. 15 by the Treasury Department, are necessary for the IRS "to continue return processing activities to the extent necessary to protect Government property, which includes tax revenue, and maintain the integrity of the federal tax collection process, along with certain other activities authorized under the Anti-Deficiency Act."

Basically, this means processing 2018 tax returns being filed this year — some already in the queue thanks to the early opening of the Free File program — when the full tax season 2019 opens on Jan. 28.

But taxpayers won't be getting any help from IRS reps, either by phone or in person, in completing those filings.

Broader, and contested, definition of "essential" staff: The Anti-Deficiency Act is the federal law that sets out which federal government activities can continue even when Uncle Sam officially shuts down. These excepted government operations include "activities necessary for protection of life and property.

Under this current federal government shutdown, the longest in U.S. history, the nation's tax collector and other affected operations have been pushing to the law's limits, many bringing back workers who in previous closures simply remained furloughed.

That's where the sort of goods comes into play for the recalled workers. While the IRS staff the agency says it now needs back in order to get the 2019 tax return filing season underway on Jan. 28 will be at their desks, handling returns and issuing taxpayer refunds, they still will not be paid for their work.

"There is no doubt the IRS needs to get ready for the 2019 filing season…and IRS employees want to work. But the hard, cold reality is that they've already missed a paycheck and soon they'll be asked to work for free for as long as the shutdown lasts," said Tony Reardon, president of the National Treasury Employees Union of which IRS workers are members, in a statement following the IRS announcement.

"I'm worried whether these employees will have the money to put gas in their car to get to work. I'm worried that highly trained IRS employees will consider quitting so they can get a job that actually comes with a paycheck,” added Reardon.

The IRS announced recall was the second piece of bad pay news received by the NTEU yesterday. Also on Jan. 15 a federal judge refused a request by the Treasury union and the National Air Traffic Controllers Association that their members be paid while being forced to work without compensation during the government closure. A separate NTEU lawsuit alleging the shutdown's work-without-pay requirement violates the Fair Labor Standards Act, filed remains pending in federal court.

What the IRS will and mostly won't do: So just what will these 46,052 IRS employees do during this revised shutdown plan?

Not much of their regular jobs. Basically, they'll be processing returns and, yes, unlike in other less politically tinged shutdowns, issuing refunds.

That's because the Treasury's latest plan says the work will be limited to:

Automated applications. IRS.gov and many automated applications remain available, including such things as Where’s My Refund, the IRS2go phone app and online payment agreements.

Telephones. No live telephone customer service assistance is currently available, although the IRS will be adding staff to answer some of the telephone lines in the coming days. Due to the heavier call volume, taxpayers should be prepared for longer wait times. Most automated toll-free telephone applications will remain operational. The IRS again encourages people to use IRS.gov for information.

In-person service. IRS walk-in taxpayer assistance centers (TACs) are closed. That means those offices are unable to handle large cash payments or assist identity theft victims required to visit an IRS office to establish their identity. In-person assistance will not be available for taxpayers experiencing a hardship.

Taxpayer appointments. While the government is closed, people with appointments related to examinations (audits), collection, Appeals or Taxpayer Advocate cases should assume their meetings are cancelled. IRS personnel will reschedule those meetings at a later date, when the IRS reopens.

Taxpayer correspondence. While able to receive mail, the IRS will be responding to paper correspondence to only a very limited degree during this lapse period. Taxpayers who mail in correspondence to the IRS during this period should expect a lengthy delay for a response after the IRS reopens due to a growing correspondence backlog.

Tax-exempt groups. The IRS will not be processing applications or determinations for tax-exempt status or pension plans.

Audit, other enforcement follow-up on hold: The only folks happy with the IRS shutdown are tax scofflaws.

Treasury says that for the shutdown's duration, the IRS will not conduct audits. And while it will still send out automated initial contact letters will continue to be mailed, IRS collection activity generally will be restricted to automated processes.

The IRS also will halt certifying for the State Department any individuals for passport eligibility. These are the cases where official travel documents can be pulled or not issued when applicants owe the IRS a large amount, set at an inflation adjusted $52,000 for the 2019 tax year.

But the unplanned relief for tax evaders is short-term.

The IRS says that recalled Criminal Investigation staff will continue their work during this period.

And it's a good bet that the more routine non- or under-payment taxes cases will go back to the top of the collections enforcement list once the IRS gets its full funding.

Tax responsibilities remain the same: Aside from more staff to process taxpayer turns and issue refunds, the latest plan follows much of the earlier template as to what unpaid IRS employees will and won't do during a government shutdown.

One of the things that's unchanged is that all us taxpayers must, even when our national tax collector doesn't have the money to run at its full pace, still comply with the country's tax laws.

"[A]ll taxpayers should continue to meet their tax obligations as normal," reminds the IRS in its revised operational statement. "Individuals and businesses should keep filing their tax returns and making payments and deposits with the IRS, as they are required to do by law."

That includes meeting the regular April 15 (for most but not all) filing deadline.

To meet our tax compliance duties, the IRS is urging all of us to go electronic as much as possible. This includes going online as far as seeking tax-filing help and submitting our tax returns.

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