IRS releases government shutdown contingency plan

The IRS on Friday released its contingency plan  for what it will do if the federal government shuts down Oct. 1. The 61-page plan covers preparation for a shutdown, implementation, and reactivation of functions, but it anticipates a government shutdown of no more than five days. A longer shutdown would require a reassessment by the IRS deputy commissioner for operations support. With the Oct. 15 deadline for individual returns on extension quickly approaching, most tax return processing would continue during the shutdown.

Certain IRS activities would continue during a government shutdown, as allowed by the Antideficiency Act, P.L. 97-258. These include activities funded with appropriations that do not expire at the end of the government’s fiscal year, functions that are authorized by statute to occur in advance of appropriations, and certain other activities that are required by duties imposed on the IRS. The IRS gives as an example of the latter category the design and printing of next year’s tax forms and the completing and testing of next filing season’s programs.

Activities necessary for protection of life and property are also excepted from the shutdown, and the IRS estimates that of its 8,752 excepted employees, 8,273 fall in the category of being engaged in protection of life or property (this includes law enforcement activities). The IRS includes in this category processing of tax returns, protection of lien and seizure cases, maintaining building security and facilities personnel, and criminal law enforcement operations.

Nonexcepted functions, which would shut down, include IRS headquarters and administrative functions, audits and examinations, processing of paper returns that do not include remittances, legal counsel, and taxpayer services. The IRS expects 90% of its employees (almost 86,000) to be furloughed during a government shutdown.

When the government restarts, the furloughed IRS employees will be expected to return to work—no later than four hours after the IRS notifies them to return, if the notification comes during a workday.

—Alistair Nevius (anevius@aicpa.org) is the JofA’s editor-in-chief, tax.