Salt Lake City, Utah – I have had a few people ask me about what happens with IRS collection efforts if the Federal Government were to shut down. Here has been my response:
The government officially reached its statutory limit on January 19, 2023, according to Treasury Secretary Janet Yellen. Since then, the government has implemented what are called Extraordinary Measures for the government to pay its obligations. Forbes defines “Extraordinary Measures” as “tricks the Treasury Department can deploy to prevent the government from defaulting on its debt, including moving money from one agency to another when payments come due. . . “. It is believed that the federal government will run out of funds sometime in early June, 2023. This date could be pushed back to sometime between July and September if tax receipts meet or exceed estimates.
So, what does this mean for taxpayers. it means that it is still important for taxpayers to pay quarterly estimated taxes on time and payroll taxes on time. The shut down does not affect statutory time frames or statute of limitation deadlines. This goes for the tax court as well. All petitions still must be timely mailed and filed. Remember, even though IRS operations will be severely limited, the underlying tax law remains in effect, and all taxpayers are required to meet their tax obligations as normal.
What about IRS collection efforts? Automated letters will still be mailed. If a deadline is associated with the mailing, a timely filing, mailing and response still needs to be met. Collection efforts assigned to local revenue officers may be delayed due to the shutdown but work still needs to continue in preparations for resolution and settlement. Just because the IRS shuts down does not mean we get to shutdown.
If you receive an IRS letter and are unsure how to respond, please give us a call. Tax problems are legal problems, and we solve both. If you or someone you know has an IRS Tax Nightmare, we can help, please contact us by either phone at (801) 323-2112, or by email and kbrown@strongandhanni.com or go to my personal webpage at: https://strongandhanni.com/attorneys/attorney-kent-brown/
With government disfunction, it is the wild, wild west. Who knows where this ride will go.
Kent M. Brown
