The Government Shutdown Is Over — But Will You Get Your Tax Refund on Time?

Don't expect to get your money back as quickly as other years.
  • The shutdown of over a month has left the IRS with a massive backlog of work.
  • The agency is behind on hiring staff for the critical tax season.
  • Although the IRS hasn’t announced delays, issues at the department could ultimately make it difficult to process every return in a timely fashion.

If you began rejoicing at news of the government reopening, assuming it meant your much-needed tax refund would come in a timely fashion, you might need to see about recorking that champagne.

Although the IRS is expected to return to its full staffing levels, the scramble to get caught up after over a month of getting by with a skeleton crew could mean that your refund will still be delayed, with The Washington Post reporting that the National Taxpayer Advocate was warning White House staffers that it would likely take at least a year for the agency to get completely caught up. Here’s a closer look at what to prepare for as you file your tax returns.

Backlog of Work Could Delay Tax Returns

The full IRS might soon be back at work, but the lengthy shutdown that had many of the workers furloughed means there’s a massive backlog of work that was left undone during the shutdown. The IRS is currently dealing with 5 million pieces of unanswered mail from taxpayers, doubling the 2.5 million pieces that had been awaiting a response as of Jan. 16. Part of that is due to in-person taxpayer assistance centers being closed for the shutdown as the number of daily pieces of mail jumped from 200,000 as of Jan. 16, to over 700,000 by the end of the shutdown.

What’s more, the staffing issues caused by the shutdown have created their own staffing issues. The IRS lost about 25 IT staffers per week during the shutdown as people found other work, and there are about 2,000 recently hired employees who still need to be trained. That all is in addition to a wave of new hiring for the just-begun tax season that couldn’t be done during the shutdown.

All of this has the National Taxpayer Advocate conveying to House staffers that the IRS has a time frame of 12 to 18 months before it will be completely caught up.

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Potential IRS Delays Amid Another Shutdown

For now, the IRS hasn’t indicated that refunds will be delayed unless you’re claiming either the earned income tax credit or the child tax credit — which about 30 million Americans do each year. And that’s actually part of an ongoing effort to combat fraud that has held back such returns until mid-February for the last few years.

But just because the IRS hasn’t indicated a delay yet doesn’t mean things won’t be taking longer than usual. Not only is the IRS working to deal with a huge backlog of work left from its time on furlough, but it will also be scrambling to work under the looming cloud of another potential shutdown in less than three weeks. In order to avoid it, President Donald Trump and Congress would need to reach an accord on immigration and border security.

As such, it remains unclear how the refunds of most taxpayers are likely to be affected by the shutdown.

Find out the No. 1 thing you should learn from the shutdown in case there is another one.

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About the Author

Joel Anderson is a business and finance writer with over a decade of experience writing about the wide world of finance. Based in Los Angeles, he specializes in writing about the financial markets, stocks, macroeconomic concepts and focuses on helping make complex financial concepts digestible for the retail investor.