The IRS reopened October 17, 2013, after 16 days of closure due to the lapse in appropriations that began Oct. 1. During the shutdown, all IRS audits and examinations were suspended, as was all nonautomated collection activity, but the government stated that IRS criminal law enforcement and undercover operations were not suspended. The shutdown did not provide taxpayers with an exception to meeting statutory deadlines; therefore, extended 2012 individual income tax returns were due by October 15, 2013, and all other tax deadlines remained in effect for both business (including payroll) and individual tax filings. Appointments for exams and audits, tax collection and appeals and Taxpayer Advocate cases were suspended.
But, because statutory requirements affecting taxpayer rights were not suspended by the shutdown, taxpayers must adhere to time sensitive deadlines or they may lose valuable rights. For example, if a taxpayer wishes to appeal an assessment to the U.S. Tax Court, the statute requires a petition to be filed within 90 days from the date of issuance of the statutory notice of deficiency letter. Taxpayers also have the right to obtain a hearing to object to a proposed lien or levy, provided they file the request within 30 days of the time of the mailing of their notice. Statutory deadlines such as these will not be extended due to the shutdown, and taxpayers must continue to comply with these deadlines. Additionally, if taxpayers believe they are due a refund, all claims for refunds must be timely filed within the period required by the statute of limitations, even though the IRS did not issue refund checks during the shutdown.
The IRS also said that during the shutdown it would take steps to protect ongoing bankruptcy, lien, and seizure cases and to prevent lapses in the statute of limitation. With the furlough of some 86,000 employees, however, it remains to be seen whether the IRS will miss some deadlines for assessment due to the two weeks shutdown. For example, a Trust Fund Recovery Penalty (TFRP) must be assessed against an individual within the later of 3 years of the April 15 following the year during which the quarterly liabilities arose if the 941 was timely filed, or the date of actual filing of the 941s if later than April 15 of the following year. (The IRS takes the position that there is no statute of limitations on a TFRP assessment if the IRS prepares a substitute 941 return). The IRS usually makes this deadline, though there are instances where it has missed an assessment statute. Because of the more than two week suspension of audits and collection field activities, scrutiny of the timeliness of TFRP assessments is worthwhile. By the same reasoning, assessments for income tax deficiencies should be double checked for timeliness.
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