IRS Closed in April?!

Would the IRS get an extension, if there’s a government shut down this week?  Would penalties and interest be reduced by the days of the shutdown?  Would you get interest on your refund for days when the “CLOSED” sign was up?  Do filing deadlines move?  What about notice deadlines?

In Congressional testimony this week, IRS Commissioner Doug Shulman acknowledged that the agency is in discussions with the White House about what to do if they aren’t allowed to stay open during filing season.  The last set of contingency plans was done for an October shutdown.  The existing program calls for checks still going out, but no processing of tax returns.  No processing of tax returns in April?! Shulman was mum on the specifics, beyond suggesting that the complexity of shutdown contingencies increases at you get closer to April 18^th.  One has to wonder why Congress needs a hearing to find this particular insight. 

Shulman also talked about how cutting the IRS budget as proposed for this year would save $600 million and cost $4 billion in lost revenue.  Presumably Congressional representatives schooled in the years before “No Child Left Behind” are struggling to figure out the mathematics of this equation.   (Apologies for the late in tax season snarkiness.  I’ll stop now.)

On a more helpful note, the Wall Street Journal’s last minute tax advice column has a tiny reminder at the end that’s really important if it applies to you.  People who have a non-US bank account, or a bunch of small bank accounts off-shore that at any point in the year totaled $10,000 or more, need to note this on their tax return.  In addition you have to file a special form with Treasury by June 30.  They tell you on IRS.gov that there are no extensions for compliance on this one.  Assuming the IRS is open for business on June 30^th, this is one deadline not to miss.  The success of going after tax cheats outside the US is increasing the scope of the search.  Mess up anywhere on this topic and your chances of doing more than your fair share of deficit reduction increase greatly.