US government shutdown causes taxpayer chaos US government shutdown causes taxpayer chaos

US government shutdown causes taxpayer chaos
19 Feb 2019

The US government shutdown led to taxpayers being unable to access frozen refunds, present hardship cases while facing fines, or resolve audits of past tax returns.

Only a handful of calls from taxpayers were answered during the 35-day lapse in funding, according to the Taxpayer Advocate Service, and this situation did not improve substantially during the first week of the filing season after the government reopened either.

To make matters worse, in the first full year since the tax code was overhauled, the average refund was down 8% on last year following the first week of filing, UPI reported. The Internal Revenue Service (IRS) indicated that refunds averaged US$1,865 compared with US$2,035 for tax year 2017. The number of returns received - 18,302,000 - also dropped 12.4%.

Moreover, for the 2018 tax year, people will no longer use Form 1040A or Form 1040EZ. Instead they need to move to the redesigned Form 1040. "Many people will only need to file Form 1040 and no schedules," the IRS said on its website.

Meanwhile, in the wake of the government’s partial shutdown, US House Democratic leaders on civil service issues have asked Office of Personnel Management and Office of Management and Budget how they plan to square up pay for federal employees who were furloughed or who worked without pay during that time.

A letter signed by members said: “We have heard reports of many instances of shorted pay and inconsistent tax deductions that left workers unable to make mortgage or rent payments. They also received pay checks that did not reflect adjustments for missed insurance premiums, Thrift Savings Plan loan repayments, and court-ordered deductions, which have resulted in confusion and additional burdens on federal workers.”

According to FEDweek, the letter asked for certain information, such as what plans had been developed to ensure all affected employees were paid in full, what options workers had for retroactively paying missed garnishments, and what information agencies were providing their staff to help ensure their tax deductions are accurate.

Meanwhile, the US government is gearing up to overhaul and upgrade its payroll system thanks to a US$20.7 million investment by the Technology Modernization Fund, Paymnts reported. The aim is to introduce a single, cloud-based payroll system called NewPay, which will be operated by the General Services Administration (GSA) and used by all government agencies.

The move will enable the GSA to move payroll management out of its existing data centre in Kansas City.

Emma Woollacott

Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.

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The US government shutdown led to taxpayers being unable to access frozen refunds, present hardship cases while facing fines, or resolve audits of past tax returns.

Only a handful of calls from taxpayers were answered during the 35-day lapse in funding, according to the Taxpayer Advocate Service, and this situation did not improve substantially during the first week of the filing season after the government reopened either.

To make matters worse, in the first full year since the tax code was overhauled, the average refund was down 8% on last year following the first week of filing, UPI reported. The Internal Revenue Service (IRS) indicated that refunds averaged US$1,865 compared with US$2,035 for tax year 2017. The number of returns received - 18,302,000 - also dropped 12.4%.

Moreover, for the 2018 tax year, people will no longer use Form 1040A or Form 1040EZ. Instead they need to move to the redesigned Form 1040. "Many people will only need to file Form 1040 and no schedules," the IRS said on its website.

Meanwhile, in the wake of the government’s partial shutdown, US House Democratic leaders on civil service issues have asked Office of Personnel Management and Office of Management and Budget how they plan to square up pay for federal employees who were furloughed or who worked without pay during that time.

A letter signed by members said: “We have heard reports of many instances of shorted pay and inconsistent tax deductions that left workers unable to make mortgage or rent payments. They also received pay checks that did not reflect adjustments for missed insurance premiums, Thrift Savings Plan loan repayments, and court-ordered deductions, which have resulted in confusion and additional burdens on federal workers.”

According to FEDweek, the letter asked for certain information, such as what plans had been developed to ensure all affected employees were paid in full, what options workers had for retroactively paying missed garnishments, and what information agencies were providing their staff to help ensure their tax deductions are accurate.

Meanwhile, the US government is gearing up to overhaul and upgrade its payroll system thanks to a US$20.7 million investment by the Technology Modernization Fund, Paymnts reported. The aim is to introduce a single, cloud-based payroll system called NewPay, which will be operated by the General Services Administration (GSA) and used by all government agencies.

The move will enable the GSA to move payroll management out of its existing data centre in Kansas City.

Emma Woollacott

Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.

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