More than three weeks into what is now the longest government shutdown on record, the IRS published its updated FY 2019 Lapsed Appropriations Contingency Plan last week to cover the Tax Year 2018 Filing Season. In this updated contingency plan, 46,502 of the furloughed IRS employees will be returning to work in order to prepare for and assist with the filing season that begins January 28, 2019. Despite being recalled to work, however, these employees will be returning on a non-pay status. Additionally, over 30,000 employees remain furloughed. A detailed list of personnel and list of functions by shutdown category is included as Appendix A to the updated contingency plan.
What has changed?
Under the updated contingency plan, the three categories of Excepted Activities remain, but the first two have been expanded: First, are activities “Authorized by Law and Funded” or “Category A” activities. These activities are now expanded to include the U.S. Certification Residency Program to issue Form 6166 to Taxpayers, [need comma here instead of a period] Income Verification Express Service (IVES) and Revenue & Income Verification Service (RAIVS) programs, and activities required to implement the 2017 Tax Cuts and Jobs Act. “Category B” activities are activities that fall under the umbrella of “Necessary for the Safety of Human Life or Protection of Government Property.” These activities are now expanded from the prior contingency plan to include filing season activities, and include completion and testing for this year’s filing season programs, as well as responding to taxpayer filing season questions (although there is some conflicting information about when and if call sites will be up and running). According to the most recent IRS release, “the IRS will be adding staff to answer some of the telephone lines in the coming days.” The third “Category C” covers activities “Necessary to Transition the Shutdown of Operations” and involves necessary administrative functions such as issuance and processing of furlough notices and securing and storing equipment. No changes have been made to the Category C activities to date.
What hasn’t changed?
Still on hold are the majority of non filing-related activities, including the processing of Non-Disaster Relief transcripts, audit functions, examinations of returns, processing of all electronically-filed returns that do not include payment, non-automated collections, legal counsel, some taxpayer assistance, and other non-essential administrative and system functions. IRS taxpayer assistance centers remain closed, and the IRS has advised taxpayers that all persons with appointments related to examinations, collections, Appeals, or Taxpayer Advocate cases should “assume their meetings are cancelled.” As before, Criminal Investigation work will continue.
Kati Sanford Goodner is based in the firm’s Knoxville office. Commercial Litigation and Tax Controversy are Kati’s primary focus, although her experience and practice routinely includes Estate and Trust Litigation, Conservatorships, and advising her small business clients in a variety of matters ranging from formation issues to shareholder disputes and litigation. With an extensive background in litigation, Kati represents taxpayers before the Internal Revenue Service and the Tennessee Department of Revenue in both civil and criminal tax matters, whether in the early stages of an examination, at the collections stage, or seeking relief from IRS liens and levies through the administrative process or in Court. She is adept at handling complex litigation, has represented clients in Tennessee and across the country, and she routinely works with professionals ranging from accountants to highly-specialized physicians and engineers.
Kati is a regular speaker and author on tax-related matters, including legislative changes and practical applications of the tax code for individuals and small businesses. In addition to serving on various boards within the Knoxville, Tennessee, and American Bar Associations, she is a member of the Tennessee Bar Association’s Tax Law Section and the American Bar Association’s Section of Taxation. She also serves as a member of the City of Knoxville’s Better Building Board and enjoys working with middle school girls at Cedar Springs Presbyterian Church.