Could a government shutdown affect the timeliness of tax refunds?

30 percent of people file taxes by paper

With talk of a government shutdown, being a tax preparer eleven days before the deadline is as much about crunching numbers as it is about calming clients down.

"There's a lot of nervousness and most of the nervousness is, 'will I get my refund or not?'" said Scott Shrader, the VP of the Liberty Tax Service of Palm Beach County.

Liberty Tax Service will file 5,000 returns this tax season at its nine Palm Beach offices, and they have good news for most.

If you file electronically, you'll get your money in the normal amount of time, whether the government's lights stay on or off.

"The refunds are a very automated process. They don't have anybody there writing and signing checks. It's all automated," said Shrader.

But about 30 percent of people file by paper, either because they choose to, or they have to. Liberty says if you've adopted a child this year or are eligible for certain home-buyer credits, you have to file old-fashioned paper returns.

"Somebody actually has to receive them, open the envelopes, and put them into the system," said Shrader.

An even bigger problem could arise if the shutdown wears on.

Many of the IRS employees who handle tax returns are seasonal, and may have other jobs when the shutdown ends. Then the delay could grow exponentially.

"The longer the shutdown, the longer the delay when they come back," said Shrader.

This year's deadline to file is April 18th. That will not change if there's a shutdown.

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