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Shot clock running down: shutdown costs IRS time to investigate

Basketball season is almost here. The Dallas Mavericks and other NBA teams are playing pre-season games, tuning up for the opening of the regular season two weeks from now.

A rule that is fundamental to pro and college basketball is of course the shot clock. In the pros, teams have 24 seconds to shoot the ball upon getting possession of it. In college, it's 30 seconds. And if no shot hits the rim during that allotted time, it is a turnover and the team loses its chance to score on that possession.

In tax law, too, there are time limits. In civil cases, the IRS generally is allowed to look back three years to question whether someone has paid all of their taxes. In this post, let's look at how one tax expert has analogized time lost by the IRS during the government shutdown as time being taken off the shot clock.

A tax law professor at New York University, Joshua Blank, made the shot-clock analogy in an interview with National Public Radio about the effects on the IRS of the partial government shutdown. That shutdown began more than two weeks ago and has furloughed about 90 percent of IRS workers.

NPR noted that, unless there are allegations of criminal tax fraud, the IRS normally is allowed to go back only three years to question whether someone has paid sufficient tax. The three-year limit does not apply to criminal investigations. But it is the general rule in civil cases.

What this means, in terms of the federal shutdown now in its third week, is that the IRS has effectively lost that amount of the three-year period to question someone’s taxes.

It’s true that the IRS can still take more time if there are criminal allegations. In most cases, however, the furlough that sidelined so many IRS workers has, as the professor put, cost the IRS time on the shot clock.

To be sure, two weeks may not seem crucial when the agency has three years. But when the shutdown ends and IRS workers return to their desks, they are likely to face a large backlog of problems and questions that will take time – more time off the shot clock – to unravel and address.

Source: NPR, "The IRS Can't Take Your Questions. It Will Take Your Return," Dan Bobkoff, October 15, 2013

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