Datasets:

---

Recag

/

Rp_CommonC_376

like 0

ERROR: type should be string, got "https://www.marketwatch.com/story/3-unfortunate-ways-the-government-shutdown-will-impact-you-2019-01-04\nEconomy and Policy\nHow the Government Shutdown Will Affect Your Taxes and Much More\nAlessandra Malito, MarketWatch\nJan. 7, 2019 11:20 am ET\nPhotograph by Mario Tama/Getty Images)\nThe government’s partial shutdown is poised to put many taxpayers in tough spots.\nThis is the second-longest shutdown in 20 years—going on two weeks—and sparked by a disagreement between both parties to fund President Donald Trump’s proposed border wall. A partially closed government has the potential to affect nearly every facet of American life, including delaying package deliveries and air travel. Federal employees are also at risk of missing credit-card payments or paying their rent or mortgage bills — about 420,000 people could end up working without pay.\nThe Internal Revenue Service is one agency currently strained. Less than half (43.5%) of the agency’s roughly 80,000 workers are expected to work at the beginning of this year, under the IRS’s contingency plan. (Before the end of 2018, only 12.5% of the workforce were working). Their jobs will include designing and printing upcoming tax forms, overseeing electronic returns processed through the system, continuing IRS computer operations to prevent loss of data and conducting criminal investigations.\nThe IRS did not respond to a request for comment.\nRead more:How the Government Shutdown Is Affecting the Nation’s Securities Regulator\nStill, fewer employees will affect taxpayers and tax professionals preparing for the 2019 return filing season, which is widely expected to begin at the end of the month.\nHere’s where taxpayers are at risk:\nDelayed refunds\nThe IRS will continue to accept returns, as well as tax payments, but it won’t issue refunds during the shutdown. The impact this will have on taxpayers during the 2019 tax season will be significant if the shutdown extends for the next few weeks, but could even affect some taxpayers now — primarily, individuals who filed amended returns and businesses who have unique filing deadlines, said Tim Steffen, the director of advanced planning at financial-services firm Baird.\nRead more:Trump Is Threatening to Close the Border With Mexico. What Would That Mean for Stocks?\nThe last government shutdown, in January 2018, lasted only two days and did not affect taxpayers. But the one prior, which happened in 2013 under the Obama administration, went on for 16 days and caused $2.2 billion in delayed refunds to individuals and another $1.5 billion to businesses. More than 90% of IRS workers were furloughed, meaning they were not working under the shutdown.\nFor some Americans, tax refunds are critical to their financial well-being. Most Americans use refunds to pay off their credit cards or student loans, or pad their savings accounts. Others take trips or put the money toward their personal goals, like a fairy tale wedding or a dream home.\nBut many Americans also spend their tax refund — almost immediately — on their health. Health care spending typically rises 60% the week following a tax refund, according to J.P. Morgan Chase Institute, especially for cash-strapped families who can’t afford out-of-pocket medical expenses.\nNo transcripts for loans\nHomebuyers might have a harder time getting proof of income for their home-loan applications. Lenders typically require a transcript, administered by the IRS and called Form 4506-T, which verifies income for potential homebuyers. Under a government shutdown, the only transcripts the IRS will issue are those related to disaster relief efforts, according to the contingency plan.\nRead more:Will Bank Stocks Rally in 2019?\nTaxpayers who work for big companies may not have too much of an issue, if a bank or other lender is willing to accept W-2 forms the company has filed. But that might not work for everyone, Steffens said, especially given how easy it has become to forge documents. Potential homebuyers who are also self-employed or retired might find trouble without a transcript, which could lead to a delay in the home buying or finding other methods of proof.\nThe good news: If someone in need of a transcript already has a tax professional named with a power of attorney, that tax professional can retrieve a transcript without waiting for the IRS through an online portal for practitioners, said Harvey Bezozi, founder of Your Financial Wizard, a tax consulting firm in Boca Raton, Fla. To give a tax professional a power of attorney would cost time and money, however.\nIRS call sites are also unavailable during the shutdown. Taxpayers call service centers when they have questions related to filing returns or receiving refunds. Contacting the IRS has always been difficult, with many people often put on hold for a while, Steffen said. “You won’t even get that nowadays,” he said. “It can be harder to get answers from calling the IRS right now.” Practitioners will also face issues — the Practitioner Priority Service, a support line for tax professionals, was not accepting calls on Friday either.\nOther agency responsibilities not supported in a government shutdown include legal counsel, service center processing (such as data transcription, error resolution or coding) and planning, training or development activities within the agency.\nPaused audits and exams\nTaxpayers may welcome one impact of the shutdown: Audits and exams have been put on hold.\nPeople are chosen for audits when an IRS software program randomly selects the taxpayer or when that person is linked to someone else, like a family member or business partner, being audited. The agency can audit returns up to three years old, and inaccuracies or falsehoods could lead to fees or, in more serious cases, criminal charges of tax evasion or fraud.\nEven with a fully staffed agency, however, the IRS audited less than 1% of returns in 2017, and that figure expected to be lower in 2018.\nBut taxpayers who anticipated an audit shouldn’t get too excited, Bezozi said. Audits may be delayed a few weeks, or even months, but they won’t be forgotten. “If someone is going to be audited and has a legitimate issue, it would be delayed, but eventually they’ll be audited anyway,” he said.\nComments? E-mail us at editors@barrons.com\nThis article originally appeared on MarketWatch."