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IRS Girds for Possible Government Shutdown

April 1, 2011

The Internal Revenue Service is preparing for the possibility that the federal government may shut down just as tax season draws to a close if Democratic and Republican lawmakers can’t reach an agreement on a continuing budget resolution.

Testifying before a House Ways and Means subcommittee hearing on the IRS budget on Thursday, IRS Commissioner Doug Shulman was asked what the IRS would do in the event that the government does “shut down” as taxpayers race to get their taxes filed before the April 18 deadline.

Shulman indicated that the IRS is doing some planning on how to deal with a potential shutdown.
“We’ve never had a government shutdown in the middle of the filing season before,” he said, according to “The closer we get to April 15, the more consideration and factors are at play.”

The IRS has been holding discussions with the Office of Management and Budget on what to do in the event of a shutdown. “We run a $13 billion operation, so the idea of stopping it for a few days or weeks is strange,” said Shulman, according to The Hill’s On the Money blog.

Shulman also was called upon to defend the IRS’s budget request, which could be on the chopping block, depending on how negotiations over spending cuts in Congress get resolved.

Shulman argued that Republicans’ proposed cut of $600 million to the IRS budget would be “potentially devastating” and could cost the federal government $4 billion in foregone revenue.

The chances of an actual shutdown appear to be slim, though, as most lawmakers want to avoid a repeat of the last shutdown in 1995 when voters turned against the House Republican majority. Former Speaker of the House Newt Gingrich was on Capitol Hill on Thursday telling fellow Republicans about his experiences back in the day. He advised GOP freshmen to steer clear of a government shutdown and “keep the government open.”

So hopefully when tax practitioners try to file their clients’ returns with the IRS in the next couple of weeks, they won’t see a “Closed” sign on

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