The Internal Revenue Service, like many other government agencies, operates on a skeleton as the government's closure continues unabated. But don't think that means getting a break on paying taxes.
The IRS will continue to treat returns regardless of the ongoing budget struggle in Washington. But when it comes to issuing refunds, it won't happen until the government completely reopens.
Now, it's not much of a problem. Few people register tax during the first week of the year. But as we get deeper into January and the tax deadline begins, it can create a demand with financial impact.
Last year, IRS issued $ 1[ads1]2.6 billion in reimbursements by February 2. Two weeks later, a total of $ 101.2 billion goes. And by March 30, 73 million households had received $ 212 billion in refunds.
The majority of people received repayments last year – some 65% – believed them to be savings, according to Morgan Stanley.
Another 35% paid off debt and 12% splurged on vacation, while 8% made a big purchase, such as car or television.
There can be serious consequences for businesses if the closure affects consumer spending on refunds. Of special attention: The Government's closure takes place in the first part of the year. Early filers tend to receive refunds, while people who owe the IRS usually wait until the last minute.
Even more frustrating? The average 2019 refund is expected to be 26% higher than the 2018 average.
In addition, applications as accountants can slowly continue to understand all the changes in 2019 tax law.
There are some bright spots. The IRS is allowed to take in more workers as tax season approaches, which can mean that repayments go faster when the agency starts sending them. Also, the IRS does not usually perform audits during a termination. Anyway, they've been down for a while now, due to budget cuts.