Tax Filing Deadline Looms: Navigating IRS Shutdown Challenges

As the federal government remains in a state of shutdown, taxpayers are faced with an important reminder: the deadline for filing taxes is still set for October 15. Although many IRS employees are furloughed, a core team is actively processing electronically submitted tax returns.

Importance of Filing on Time

Tom O’Saben, who serves as the Director of Tax Content & Government Relations for the National Association of Tax Professionals (NATP), emphasizes the significance of meeting this deadline. Primarily, this date pertains to individuals who had previously filed for a six-month extension back in April. Additionally, there are options for further extensions in the event of federally or state-declared disasters.

IRS Operational Challenges

Drawing on three decades of experience in the tax sector, O’Saben commented, “The only time I’ve ever seen a change in the due date was when we went through COVID.” Although the IRS initially set up a contingency plan to sustain operations for five days during the shutdown, this time frame has now passed, leading to staff reductions. Consequently, this may significantly impact the level of service available, particularly for those submitting paper returns or seeking assistance through phone channels.

Potential Penalties for Late Filing

Lisa Greene-Lewis, a representative from TurboTax, warns of the penalties that accompany missed deadlines. Taxpayers could face a failure-to-file penalty of up to 5% of the owed amount for each month the return is late, unless a refund is anticipated. In cases where a refund is expected, filing on time is still advantageous to expedite that process.

Advice for Taxpayers

In situations beyond a taxpayer’s control, O’Saben suggests that penalties may be appealed. Greene-Lewis also advocates for taxpayers to meticulously organize their documentation to ensure they can maximize their deductions and credits efficiently.