Christopher Rizek Comments on Best Practices for Tax Practitioners During Government Shutdown

During the five-week government shutdown that ended January 25, deadlines (both statutory and discretionary) came and went for many practitioners. Without a way to get in contact with IRS staff and attorneys or the Tax Court, their best advice was simply to keep documents showing they tried their best to comply.

Many practitioners noted the uncertainty about what happens to petitions mailed to the Tax Court. Christopher S. Rizek of Caplin & Drysdale said that for taxpayers whose petition deadlines fell within the period of the shutdown, “the best advice I can give is to just document that you’re filing,” such as by using a trackable delivery service and requesting a return receipt.

“That way you can prove you did it,” he said.

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‘Holding Pattern’

Practitioners described myriad ways their work had hit a wall, from postponed meetings to progress on settlements grinding to a halt.

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Rizek said that, although frustrating, the main concern isn’t the halt to the back-and-forth communication between practitioners and the IRS; rather, it’s the statutory deadlines that are the most problematic because the IRS has little to no flexibility when it comes to those.

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Premature Escalation

A big challenge remaining for the IRS now that the shutdown is at least temporarily over is sifting through the backlog of documents they received to ensure they aren’t prematurely escalating matters.

“I’m worried about . . . the Service making assessments prematurely, when maybe they haven’t been able to process something,” Rizek said.

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Good-Guy IRS

Practitioners lost contact with many of their counterparts in the IRS once the shutdown started, but they relayed several stories of IRS employees who went the extra mile in the moments leading up to the shutdown.

“Some of the IRS lawyers were pretty forward-looking,” according to Rizek. One IRS attorney contacted Rizek just days before the shutdown to check in and make sure he filed a Tax Court petition before the shutdown went into effect, which Rizek did.

Another partner at Rizek’s firm wasn’t so lucky. That partner needed to file a joint status report, but there was no one at the Justice Department to sign or review it, so the partner ended up having to file a single report and hope for the best.

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Mixed Bag

The shutdown caused many headaches, but some taxpayers and practitioners may have found the delays fortuitous.

“I think a lot of clients are perfectly happy [when] the IRS isn’t working,” said Rizek, who focuses on tax controversies and audits. Clients aren’t receiving information document requests as long as the IRS is in shutdown mode, so “they’re not being pestered by the IRS at this point,” he said.

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Excerpt taken from the article “Business of Tax: Practitioners’ Top Shutdown Advice? Keep Your Receipts” by Jonathan Curry for Tax Notes.