The partial government shutdown has left some companies unable to get a taxpayer identification number from the IRS, holding up routine business deals until the agency’s workers return, the Wall Street Journal reported. Andy Mattson, an accountant with Moss Adams LLP in California who advises Silicon Valley companies, said the number-issuing halt has delayed deals for startups, some of which are based offshore to prevent double taxation of investors. Without a tax identification number, a foreign startup can’t get bank accounts to receive venture-capital money or make crucial tax elections, Mattson said. The shutdown’s impact on small businesses reaches beyond the slowdown in new identification numbers. “We have a buyer, but the buyer can’t actually take ownership of the business,” said Thompson. “All our tax planning is done. We are retiring. We are trying to be done, but it’s not happening.” The IRS system is still processing online requests for new taxpayer identification numbers. Many businesses in the U.S. or a U.S. territory can use the online system. But paper applications that need to be processed by IRS workers are stuck for now. Physical applications are typically made by foreign companies and by some companies in complicated financial situations. The IRS has been operating with a skeleton staff since the shutdown started on Dec. 22. Just one in eight employees are working, largely to maintain computer systems and investigate crimes, according to the IRS’s shutdown plan. Under federal law, the IRS can generally still perform activities needed to protect life and government property, including tax revenue.
