Three Ways the Government Shutdown Could Affect You

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President Trump said Friday that the government shutdown triggered over an impasse on border protection could last months or even years, which could spread its impact far beyond the 800,000 federal workers and additional government contractors currently affected. History shows that's unlikely—the longest recent shutdown, in 2013, lasted about two-and-a-half weeks—but it's still wise to know how it can affect you, and to be prepared.

Tax Refunds Could Be Delayed

The Internal Revenue Service, which is part of the currently-unfunded Treasury Department, is being run by a skeleton crew of about an eighth of its workers. Those folks are mainly operating the agency's computer systems to ensure, among other things, that taxpayers can continue get electronic information related to the upcoming tax season, which is still scheduled to begin in late January. 

The IRS slowdown doesn't let you off the hook in terms of paying your taxes. Deadlines remain in place. Self-employed people—and seniors who make high-enough income—still have to submit their estimated quarterly tax payments by the normal, Jan. 15, 2019, deadline. With the exception of victims of federally declared disaster areas, who were granted extensions, "the tax deadlines are unchanged," IRS spokesperson Eric Smith told Consumer Reports before the shutdown began on Dec. 21.

You still have to pay, but the IRS will postpone paying refunds until after the shutdown ends.

What to do: If you're someone who likes to file as soon as your W-2 arrives in order to get a refund, get your tax papers together, says Barbara Weltman, a tax attorney and contrtibuting editor of JK Lasser's Your Income Taxes 2019. "Be poised and ready to file," she says. "If the shutdown continues, the IRS is not going to be answering taxpayer questions, but tax information for filers will still  be available." 

Weltman notes that lower-income filers who take the Earned Income Tax Credit already face a delay each year as the IRS verifies their tax information; they don't begin to receive their refunds until February 15. The IRS website did not indicate if that payment date would be delayed further by a continued shutdown. 

You also could take advantage of a refund advance from a private tax-prep company. Just be aware that some have hefty interest charges.

With a refund advance, you must show recent pay stubs, W2s or other income verification and some other identifying documentation; you receive funds within about a day. When your refund is processed, the tax-prep company keeps the amount you were loaned and you receive any leftover tax refund. Several storefront tax-prep companies already have begun offering refund advances.

• H&R Block: Taxpayers who begin their returns with Block's storefront taxpayer services between January 4 and February 28 are eligible for refund advances of up to $3,000; there's no fee to use the service.

• Jackson-Hewitt: No Fee Refund Advance of up to $3,500 is available through Feb. 24. Another product, Go Big Refund Advance. offers refund advances between $1,000 and $7,000 with 35.9 percent interest. (Available through Feb. 3).

• Liberty Tax: Easy Advance loans come in increments from $500 to $6,250. Loans of $1,300 and less carry no interest. Loans of $2,500 have interest rates ranging from 35.77 to 24.33 percent. Both are available through Feb. 28.

Weltman recommends thinking twice before opting for an advance that charges interest. "It could be a very costly option," she says.

Your Mortgage Process Might Slow Down

If you've applied for a mortgage, you could wait longer for the closing, but only if the shutdown drags on for more than a fewq weeks.

"The government shutdown is having a minimal impact on the mortgage industry, at best," said Mat Ishbia, chief executive of United Wholesale Mortgage in Pontiac, Mi.

Still, some loans could be affected. Mortgages require verification of past income through the IRS's 4506-T income-tax transcript; with the agency working with a bare-bones staff, processing of those forms has stopped. And if you've applied through the U.S. Department of Agriculture, Federal Housing Administration, or Department of Veterans Affairs, your loan has mostly been halted.

"But lenders still are closing thousands of loans a day," Ishbia says. 

Ron Haynie, senior vice president of mortgage finance policy at the Washington, D.C.-based Independent Community Bankers Assn., generally agreed with Ishbia's assessment. The good news, he noted, is that the busy season for mortgages hasn't started yet so not many mortgages are getting backed up in the pipeline.

For another, Fannie Mae and Freddie Mac, the quasi-government mortgage agencies that back most U.S. mortgages, have issued guidance that allows lenders to authorize loans without some of the usual formalities, Haynie said. Lenders can merely have borrowers sign the forms authorizing the IRS to produce income-tax transcripts with the expectation that those documents will be released after the shutdown ends. 

"You don’t need to stop closings or stop processing loans," Haynie said. "But the longer it goes on, the bigger an impact it will have." 

For instance, mortgage borrowers who have been furloughed by the federal government can show they'll be getting income eventually. But a lack of funds could affect their ability to pay other loans, which could affect their credit scores.

What to do: If you've applied for a mortgage, keep in close touch with your mortgage banker about changes in your loan's status. If your loan application is through the FHA or Veterans Administration or USDA and you want to close fast, talk to a private lender about other options. If you're using a private lender already and are being held up by the shutdown, talk to the bank about getting a longer interest-rate lock—without having to pay extra interest.

"The longer the lock, the more the loan is going to cost," Haynie said. "Some lenders might not swallow that cost, but others might."

Robocalls Could Bother You Again

The Federal Trade Commission's Do Not Call Registry is not in operation during the shutdown. And the online complaint system run by the Federal Communications Commission also is down. The FCC is still taking complaints by phone at (888) 225-5322.

This means you could be getting more tedious robocalls from businesses you'd rather not hear from, says Maureen Mahoney, a Consumer Reports policy analyst who focuses on telecommunications.

What do to: "We encourage consumers to ask their phone company if they offer free robocall-blocking tools or consider a call-blocking app, and to let calls go to voicemail if they are not in your contacts," Mahoney said. "But this just reinforces the need for the FCC to take action to provide consumers strong, reliable robocall protections."

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