How a government shutdown will impact small business owners during tax season

There has been talk of another government shutdown on the horizon (as of January 30, 2024, when I am writing you all this incredibly helpful, non-overwhelming, easy-to-read blog post 😉 )

The first thing you should know is that this shutdown is just speculation – the timing and the chances of this going through are unknown. 

But if this does go through during tax season, the Internal Revenue Service (IRS) operations will be affected as it is a government entity. 

So, how will a government shutdown affect the upcoming tax filing season? Other than giving me (and other CPAs and tax accountants) a big ol’ headache, not a whole ton is going to change. 

TAX DEADLINES

Tax deadlines do not change during a government shutdown. I repeat, even if the government is shutdown, you still need to file and pay your tax bills on time!! 

Taxes are still due, as are your estimated quarterly tax payments, and your tax returns should be filed according to the usual deadlines: 

• LLCs and Sole Proprietorships: April 15, 2024
• S-Corps: March 15, 2024

ELECTRONIC FILING

We strongly strongly recommend taking advantage of electronic filing. If they government shuts down, there will be a big reduction in the IRS taxpayer services, making it challenging (if not impossible) to get ahold of a representative and could potentially delay the filing and processing of your taxes. 

Along with this, we’d recommend using electronic payment methods as well. This means processing payment or a refund through your bank account, rather than opting to send/receive a check. This will reduce the likelihood of lost mail and payments.

IRS COMMUNICATION

Talking to an IRS representative during a shutdown is dang near impossible. You still may receive automated letters from the IRS during this time – make sure you send those to your tax accountant! 

→ Need a tax accountant to ask some questions to? Check out our 30-minute VIP Calls ($149).

TAX AUDITS

Yes, IRS examinations (or audits) will likely be paused during the shutdown period. HOWEVER, this should not change your accounting, bookkeeping, or tax strategy. Your financial documents will still be reviewed, and an audit is possible once things are back up and running.