Politics and Shutdowns
Well, since last week’s writing about what to expect with taxes and the government shutdown, the IRS’s official plans have been released. Some of them were as expected, and some of them were surprising.
First, the expected part is that there will not be any movement in the calendar for the tax filing season. Returns will begin to be processed on January 28th with the standard end date of April 15th applying for almost everyone. (Those in Massachusetts and Maine get an extra two days due to their Patriots’ Day holiday on the 15th and the Emancipation Day holiday on the 16th in Washington DC.)
But then a surprise came because the IRS also announced that it would offer refunds to taxpayers as scheduled. This went against previous releases by the agency about how it would handle a potential shutdown and after news of that proposed plan started to be heard more in the general media.
It stands to reason that that increased knowledge contributed to the change of plan. The longer the shutdown goes on, the more people are going to be affected (and frustrated) by it, and the government stood to receive increased backlash if many people were not receiving money rightfully owed to them.
So the takeaway from this is much the same as I stated last week – the government may be partially shut down, but your tax planning and preparation cannot be.
And this is the case no matter where your politics lie, even as taxes and politics promise to remain intertwined with a divided congress. This came into light some last week when Senator Ron Wyden, a Democrat from Oregon, sent a letter to IRS Commissioner Charles Retting asking the IRS to waive penalties that will be associated with some tax bills that Wyden expects taxpayers to face in the wake of the Tax Cuts and Jobs Act.
Last week, I said that I did not want to prognosticate about when the government shutdown would end. This time, however, I do think that I can effectively predict that Wyden’s pleas will not result in the IRS forgetting or forgiving penalties if people do not pay their tax bills.
This is a deft political maneuver by Wyden because he gets to show how he was a voice for people negatively affected by the TCJA before they even filed their taxes. And sure, there are going to be taxpayers a bit surprised when they get a tax bill not in line with what they’ve seen in the past.
It is still a political maneuver, though, for I do not anticipate there to be a great number of people seeing a huge tax bill of which they were completely unaware. It does show the push and pull that is going to continue when it comes to tax rules, though.
This further highlights the need to be prepared for your tax return. You are not going to know exactly what your return is going to look like until the tax year is over, but you can make very good guesses and be ready for it. So no matter politics or shutdowns, take on your own situation and know we remain here to help you do so
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