On January 7, 2019, in news release IR-2019-01, the Internal Revenue Service confirmed that despite the government shutdown, "it will process tax returns beginning January 28, 2019 and provide refunds to taxpayers as scheduled". Software companies and tax professionals are already accepting tax returns and will submit them when the IRS systems open later this month.
The filing deadline to submit 2018 tax returns is Monday, April 15, 2019 for most taxpayers. However, Maine and Massachusetts residents have until April 17, 2019 to file their returns.
Nearly 50,000 IRS employees furloughed as part of the government shutdown have been called back to work. Additional details about how the IRS will operate during the shutdown was released in an updated 132-page contingency plan. A web page that highlights the key information of the plan has also been created to provide taxpayers and tax preparers with the latest information available.
IRS Operations During the Appropriations Lapse Highlights
- Refunds will be paid, but returns will continue to be subject to refund fraud, identity theft, and other internal reviews as in prior years.
- Paper and electronic tax returns will be accepted, but taxpayers are urged to file electronically to speed up processing and refunds.
- The IRS website will be operational, but "live person assistance" will not be available by phone or appointment.
- Many automated applications such things as the Where’s My Refund? tool, IRS2Go phone app, and online payment agreements remain available.
- No new audits or collection activity, but automated correspondence will continue to be mailed.
- No passport eligibility certification will be provided for the State Department.
When Will You Get Your 2019 Income Tax Refund?
At this point, there is only speculation about the 2019 tax refund schedule because the refund guide that the IRS usually provides hasn't been updated yet. In the past, relatively minor tax law changes resulted in about a week delay of many taxpayer's refunds. So how will the Tax Cuts and Jobs Act, a major tax legislation affecting individuals, businesses, tax exempt and government entities, impact this year's tax refund processing time? No one really knows. And we won't know until the government shutdown ends.
In recent years, the IRS claimed that they issued 90% of refunds in less than 21 days. Wishful thinking ... but hopefully, this will hold true for this year, too. For the last few years, I have polled my current bookkeeping and previous tax clients about their experiences with the IRS --- especially how long it took them to receive their refund. Feedback from those clients who filed electronically and elected direct deposit in 2018 reported:
- Tax returns not claiming the Earned Income Tax Credit (EITC) and/or the Additional Child Tax Credit (ACTC) processed without delay. Refunds were deposited to the bank in 7 – 21 days.
- Tax returns claiming the Earned Income Tax Credit (EITC) and/or the Additional Child Tax Credit (ACTC) did not and will not process until mid-February. That's the law. Refunds were deposited to the bank in 10 - 21 days. However, those returns requiring additional information experienced a delay of 4 - 12 weeks before refunds were deposited.
- Tax returns with missing W2's, 1099's, and 1095A (info) were delayed by 2-8 weeks. Last year, the IRS had internal checks in place for those taxpayers who mistakenly thought that their social security benefits were not taxable, "forgot" to report all W2 & 1099 earnings, or did not indicate that they had acquired insurance coverage through Marketplace. For understated income, the IRS simply adjusted the tax return and refund. However, Marketplace insurance coverage required the submission of form 8962 to receive the premium credit which added additional processing time to the return.
- Tax returns that had a lien against them because of previous year tax obligations or other governmental debts (i.e. child support, student loans, etc.) were delayed by 1-3 weeks. In some cases, the entire refund went toward the debt.
Refund Tips
- You should submit your return as early as you can, but make certain you have all of your tax documents before you file. Choosing e-file and direct deposit for refunds remain the fastest and safest way to file an accurate income tax return and receive a refund.
- The Where's My Refund? tool at IRS.gov or the IRS2Go phone app remain the best way to check the status of a refund.
- Plan ahead financially. If there is a problem with your tax return, you may not find out the specific reason for some time unless it prompts an automatic action. Even if the the shutdown ends today, expect delays from "live person assistance" because of a backlog.
- Although it may be tempting in these uncertain times, beware of tax refund "loans" or "advances". You may actually get your income tax refund in 10 days. Why pay $100 or more for a week-long loan? Later, you'll regret throwing away your hard-earned money because you were impatient.
I will continue to update this page or create a new blog post as the latest news become available.
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