The IRS is facing budget cuts required by sequestration*. On Friday, April 19, the IRS announced it will issue furlough notices to its 90,000 employees. There are five furlough dates scheduled: May 24, June 14, July 5, July 22, and August 30, with a possibility of two additional furlough days.

This could affect taxpayers in a variety of ways, although the furloughs won’t affect those currently under review or the processing of tax returns.

However, as noted by Colleen M. Kelley, President of the National Treasury Employees Union,  “On these days, phone calls to the IRS will go unanswered and Taxpayer Assistance Centers across the country will have ‘closed’ signs in their windows”.

In an effort to cushion the impact of the IRS cutbacks on taxpayers, the IRS has named new strategies that are being put in place:

  • Emphasis on selecting issues for audit that will have the broadest impact on compliance, regardless of entity type or size. As a result, there will be less emphasis on the size and corporate structure of taxpayers in the designation of cases for review, and more emphasis on the nature and complexity of the issues presented.
  • Improved taxpayer collaboration on setting deadlines
  • Further developed case resolution in the Appeals process
  • Collaboration and strategy development to address issues with flow-through entities

*Sequestration – arbitrary automatic budget cuts to reduce the federal deficit taking effect in March 2013 if Congress has not agreed on a plan to reduce the deficit by $4 trillion.