November 7, 2024 Romy Threadgold Case Study, Press Releases

A U.S. government shutdown occurs when Congress and the President fail to agree on and pass the necessary funding bills for government operations by a set deadline. As a result, federal agencies must legally halt or reduce operations due to insufficient funding, suspending many non-essential services. Other essential services may continue to operate, but with limited staff and resources. The IRS would likely implement a partial shutdown, furloughing approximately two-thirds of its workforce (SOURCE). This would leave only about one-third of IRS employees active (SOURCE), significantly limiting the agency’s capacity to deliver regular services.

How this impacts Share Data’s Clients

For Share Data, a government shutdown in the U.S. poses significant operational challenges, especially if the company relies on IRS documentation and federal agency services to process transfers, verify ownership, or support compliance for U.S.-based assets.

Delays in Asset Transfers

Share Data may experience setbacks in processing transfers of U.S. assets tied to estate cases due to IRS delays in issuing Federal Transfer Certificates (Form 5173). This is particularly critical for estates with assets over $60,000, where federal clearance is a prerequisite for most U.S. financial institutions. A prolonged shutdown could mean further backlogs, causing delays in asset transfers and payouts to beneficiaries.

Verification and Compliance Challenges

Compliance is crucial to successful asset management, and the IRS plays a central role in issuing Employee Identification Numbers (EINs) and performing tax verifications, both of which are essential to estate administration. A shutdown can cause these critical services to be put on hold, delaying our ability to verify estate ownership or compliance details for U.S.-based assets, which can delay the company’s ability to meet regulatory and client deadlines.

Restricted Communication Channels

The IRS typically scales down or halts non-essential communication services during U.S government shutdowns, including helplines and support for estate tax matters. This can create obstacles when seeking updates or troubleshooting issues on cases involving U.S. assets, particularly for queries on pending estate matters or EIN applications.

Delays in Financial Transactions

A government shutdown affects financial sectors relying on federal data, such as social security and income verifications, impacting processes like mortgage approvals and similar transactions. As a result, Share Data Ltd. could see broader delays in asset management and financial transfers where federal data access is required.

Uncertainty in Future Operations

With the current federal funding window extending only until December 20, 2024, and potential shutdown risks tied to U.S. election outcomes and debt ceiling negotiations, there is an ongoing uncertainty about the continuity of IRS services. This environment may lead to further disruptions, prompting Share Data to implement adaptive workflows and contingency plans. Our goal is to provide you with a stable service, even amidst external uncertainties, ensuring your assets are protected and efficiently managed.

How Share Data Ltd. Mitigates the Effects of Government Shutdowns for Client Support

We understand that any delays or uncertainty can be challenging. We proactively address the impact of government shutdowns to ensure our clients receive consistent support. To mitigate these effects, here are potential solutions we consider in order to avoid further challenges:

• Front-Loading Essential Applications: To stay ahead of potential delays, we prioritize filing critical documents with the IRS well in advance of any anticipated shutdowns. This proactive approach helps ensure necessary documentation is submitted before service interruptions.
• Ongoing Open Communication with Clients: We regularly communicate with clients, offering updates on any expected impacts, and provide guidance on the status of cases that may be affected by federal delays.
• Advise on Potential Delays: We adapt our workflows to manage potential extended timelines and client expectations effectively. We remain prepared to resume normal operations as soon as federal services are back on track.

We’re dedicated to minimizing the impact of U.S. government shutdowns on our clients’ estate administration and asset management needs. By proactively managing documentation, maintaining clear client communication, and adapting workflows, we aim to provide reliable, efficient service, even in challenging times.

If you have any questions about how a U.S. government shutdown may impact your case, or if you’d like to discuss specific concerns, please don’t hesitate to reach out. Our team is here to provide the support and expertise you can rely on, ensuring that your interests remain our priority.