News this week is dominated by one topic: the federal government shutdown. Like most others, you may be wondering how (or if) the developments out of D.C. will affect you.
The shutdown itself is caused by Congress's failure to pass an appropriations bill allowing for the spending of money to fund day-to-day government operations. More specifically, Republicans in the House of Representatives are refusing to pass a bill that includes funding for the Affordable Care Act. Usually disagreements about these issues are handled separately from daily government funding, but the House GOP has combined the issues and refused to budge, leading to the shutdown.
From the closing of the national parks and postponement of National Institute of Health trials to thousands of furloughed employees, the temporary shuddering of the federal government directly affects the daily life of millions. Now, three days into the shutdown, the average New Yorker may still have have not felt any direct impact. The mail still arrives, the garbage is still collected, kids go to school, and (unless you are a federal employee) you still go to your job.
While your estate planning is unlikely to be impacted by this situation, one area where everyone may be affected is taxes. Most notably, what is the Internal Revenue Service (IRS) doing in the middle of this shutdown?
A story this week from the Journal of Accountancy discusses the current status of the IRS in the midst of the controversy.
The articles discusses how the IRS's usual contingency plan calls for the processing of returns throughout, but at this time "tax refunds will not be issued until normal government operations resume." At the same time, the IRS plans to continue various cases--liens, bankruptcies, seizures--to prevent statute of limitation issues.
Relatedly, federal courts will stay open for at least ten days to handle business, but if the shutdown lingers longer, then no court proceedings will occur. Please note, however, that this does not affect state court proceedings.
Most other IRS activity will stop during the shutdown, including audits, examinations, and responses to taxpayer questions. All told, about 86,000 IRS employees will stop working, with administrative services put on hold.
As a practical matter, if this shutdown lasts for only a few days more, then there may not be any long-term effects. However, all of these assessments will need to be re-evaluated if the shutdown is prolonged and commonly-used services remain out of reach for residents.