Partial Federal Government, IRS Shutdown Continues

Top congressional Republicans and Democrats met with President Donald Trump at the White House on January 2 to discuss the ongoing partial government shutdown. Federal appropriations lapsed on December 22, 2018, largely because of a tug-o-war on border security between Trump and congressional Democrats. The IRS is among federal agencies affected by the shutdown.


Democrats will officially regain the majority of the House on January 3 with the start of the 116th Congress. The new, yet returning, House Speaker Nancy Pelosi, D-Calif., is expected to introduce a previously approved appropriations package on January 3 without the over $5 billion in border security funding that the Trump administration is requesting. Additionally, Democrats are expected to propose a continuing resolution that funds Homeland Security at expired levels until February 8 to provide lawmakers and the Trump administration with more time for negotiations on border security. “We are asking the president to open up the government, and we are giving him a Republican path to do that…,” Pelosi said to reporters at the White House on January 2 after meeting with Trump.


The appropriations measure is expected to easily pass the newly Democratic-controlled House. However, it is considered unlikely on Capitol Hill that the Senate will consider it without amendment, if at all. “It is simple. The Senate is not going to send something to the President that he won’t sign,” a spokesperson for Senate Majority Leader Mitch McConnell, R-Ky., told Wolters Kluwer on January 2. To that end, White House Press Secretary Sarah Huckabee Sanders told reporters on January 2 that Pelosi’s measure “will not reopen the government.”

Senate Democrats remain largely united with their colleagues in the House on the matter. “We urge them [Republicans] respectfully to reconsider and support these bills, which are bipartisan, one of which McConnell proposed, and open up the government as we continue to debate what is the best way to secure our borders,” Senate Minority Leader Chuck Schumer, D-N.Y., told reporters while standing with Pelosi at the White House on January 2.

IRS Shutdown

Meanwhile, the IRS continues to operate on a partial basis from resources not tied to expired annual appropriations. While tax reform implementation is funded through September 2019, this year’s tax filing season stands on shaky ground.

The IRS released a Fiscal Year (FY) 2019 Lapsed Appropriations Contingency Plan in preparation of the shutdown, but it only accounted for IRS operations during the first five days of lapsed appropriations, According to the plan, the IRS will continue to process certain tax returns with payments and accept disaster relief-related transcript requests, among other things. However, several key operations would be discontinued during the 2019 tax filing season if the shutdown persists.

Generally, some of the halted IRS functions would include the following:

  • tax refunds;
  • processing of transcripts (except related to disaster relief);
  • audits; and
  • processing amended returns or Form 1040X.

Additionally, the IRS will not respond to taxpayer questions outside of the filing season, according to the plan. At this time, the IRS has not announced an official start date for the 2019 filing season. Typically, the start of the tax filing season begins mid-to-late January.

Looking Ahead

Capitol Hill erupted on January 2 after McConnell suggested that the government shutdown could continue on for weeks. “We’re hopeful that somehow in the coming days and weeks we’ll be able to reach an agreement,” McConnell told reporters at the White House on January 2.

However, congressional majority and minority leaders are expected to meet again with the president later this week. Lawmakers are scheduled to return to the White House on January 4 for another meeting with the president on appropriations, House Majority Leader Kevin McCarthy, R-Calif., on his last day as such, told reporters at the White House upon exiting the January 2 meeting.

By Jessica Jeane, Senior News Editor

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All stories by: CCHTaxGroup