Will a Government Shutdown Delay My Refund?

This week we hear from Peter in Reisterstown:

Dear Alice,

I haven’t filed my tax return yet, and I usually get a refund. If the government shuts down later this week, will it delay my refund?

Peter

Dear Peter,

Interesting you should ask. I assume you are referring to the possible government shutdown if the Democrats and Republicans cannot agree on a measure to fund government operations by midnight on Friday. I was just reading a recap on IRS Commissioner Doug Shulman’s April 6 address to the National Press Club where he spoke about that very topic. 

After Shulman stressed the importance of taxpayers filing their returns, he attempted to reassure the audience that in the event of a shutdown, although IRS may not be fully staffed, “We will be accepting tax returns. Most returns are processed automatically and will not experience any delays," he said. He, of course, was referring to e-filed returns. Shulman did warn that a shutdown would probably cause delays in refunds to paper-filed tax returns.

Peter, I’d recommend you file your tax return sooner rather than later. Not just to avoid possible problems due to a potential shutdown, but because the government has had use of your money all year. Think about it, if you have too much withheld from your paycheck or pay too much during the year through making estimated tax payments, you’ve actually given the government an interest free loan.  I know folks like to get a big refund at tax time, but wouldn’t it be better to put that money in a savings account and earn interest on it all year? I’m just saying.

Many Happy Returns!

Alice A. Reid, EA

Disclosure: The nature of taxation is complex and information used to complete your personal tax return is dynamic – meaning that one area of your tax return can affect others, while our goal is to provide you with good general information, IRS may require certain documentation or substantiation to support any tax position you take on your tax return. If your issue is complex we recommend you talk to a tax professional who can better understand your entire tax situation and advise you appropriately.