The Internal Revenue Service is putting the brakes on tax liens and levies during the federal government shutdown.
The IRS said in a Web page about the shutdown that it is not sending out levies or liens, either those generated systemically or those manually generated by employees. In a previous Web posting last week, the IRS had suggested that it would continue to send out automated notices of various kinds (see IRS Suspends Tax Refunds and Tax Court Closes during Government Shutdown).
In an effort to clarify the previous information, the IRS noted that taxpayers might still receive levy or lien correspondence with October mailing dates, but those notices were printed before IRS shutdown operations were fully complete. The IRS explained that it is standard practice for such notices to be printed with a future date to allow for mailing time to reach taxpayers.
In addition, the IRS pointed out that other letters related to liens and levies—such as notifications that a taxpayer could potentially be subject to a lien or a levy at a future date—continue to be automatically generated by IRS systems during the appropriations lapse. “However, the IRS emphasizes that these notices are not actual levies or liens; just a notification of potential future action,” said the IRS. For more information on the IRS collection process, see Publication 594.
The IRS also clarified whether its personnel are continuing to take enforcement actions during this period.
“In non-criminal cases, the only enforcement actions the IRS is taking during the appropriations lapse involve isolated instances where we need to take immediate action to protect the government's interest,” said the IRS. “So any enforcement action in this category—such as seizures—would be extremely limited. For example, where the expiration of the statute of limitations on collection action is imminent. For criminal issues, most IRS Criminal Investigation employees continue to work during this period, similar to other federal law-enforcement agencies.”
Tax Return Processing
The IRS also clarified its procedures for tax return processing. Last week, it noted that individuals and businesses should keep filing their tax returns and making deposits with the IRS, as they are required to do so by law. It urged taxpayers to file electronically because most e-filed returns will be processed automatically. Payments accompanying electronic tax returns will be accepted as the IRS receives them, although the IRS said it would be unable to issue refunds during the shutdown.
The processing of paper returns will be delayed until full government operations resume. Payments accompanying paper tax returns will still be accepted as the IRS receives them, though the IRS will be unable to issue refunds during this time. Paper tax returns will be considered to be timely filed even though the IRS is not processing paper returns, the IRS clarified. Since the U.S. Postal Service is continuing to operate during the shutdown, and they will postmark and deliver mail to the IRS. “Any return postmarked by the due date will be considered timely filed by the IRS even though processing of the return may not occur until after the return due date depending on the length of the lapse in appropriations,” said the IRS.
The IRS also noted that individual taxpayers are able to obtain tax transcripts during the shutdown. “This is an automated process,” said the IRS. “Taxpayers can still use automated tools, including IRS.gov, to request that a transcript of their personal tax records be sent to their address of record; the taxpayer will typically receive transcripts in the mail within five to 10 calendar days.”
However, a third party cannot obtain a tax transcript during the shutdown. The IRS explained that transcript requests from third parties require actions by IRS employees, who are not available due to the current lapse in government appropriations. “During this period, transcript requests by third parties, such as financial institutions, cannot be processed through the Return and Income Verification Services and Income Verification Express Service,” said the IRS. “These processes are not automated. However, individuals requesting their own transcripts can use the automated process, which remains available.” The IRS did not specify whether the transcripts are available to tax practitioners.
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