U.S investors were cautious on Tuesday, with stock futures tied to the Dow, S&P, and Nasdaq all dipping slightly as the looming U.S. government shutdown dominated most news coverage and investor concerns.
For accounting and finance professionals, the most critical economic concern isn’t the shutdown itself, but the potential disruption to federal economic and tax reporting, particularly regarding IRS issues. The Securities and Exchange Commission has reportedly advised staff to prepare for potential layoffs. More significantly, a long shutdown could delay the release of key government data, including the Bureau of Labor Statistics (BLS) non-farm payroll report, which would ordinarily be released at the end of the week.
Tax professionals are also concerned about the potential for disruptions at the Internal Revenue Service. Millions of American taxpayers take advantage of the automatic income tax extension deadline, a 6-month filing delay that comes due on October 15. The filing deadline is generally automatically granted for taxpayers awaiting late-coming forms, but any likely taxes due must still be paid by April 15 of each year. If the shutdown lingers, the IRS could be affected. However, the Treasury Department, which oversees the IRS, has a contingency plan to keep the tax agency in operation for at least 5 days if a shutdown occurs.
Also of note, many businesses with payroll taxes will have payments due on October 15. Others have due dates on October 31.
If the BLS payroll report is delayed, the primary alternative resource for businesses who rely on the data is the ADP private sector job creation report. It will likely be highly shared this week.
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Read More: How Will the Government Shutdown Affect the Stock Market?
