Tax Refunds to be Issued During Government Shutdown, White House Says

The IRS will issue tax refunds during the 2019 tax filing season even if the partial government shutdown persists, according to the White House. This announcement starkly contrasts with the IRS’s earlier position that it would not issue refunds during a government shutdown in adherence to longstanding policy.

Tax Refunds

“Tax refunds will go out,” Russell Vought, acting director of the White House Office of Management and Budget (OMB), told reporters at a briefing on January 7.

Before the shutdown occurred, the IRS released its Fiscal Year (FY) 2019 Lapsed Appropriations Contingency Plan, which stated refunds are generally not issued during a government shutdown. However, an updated IRS plan on the 2019 tax filing season is expected to be unveiled this week, an IRS spokesperson told Wolters Kluwer on January 7.

Currently, the IRS has furloughed approximately 70,000 IRS employees, accounting for 87.5 percent of its workforce, according to House Ways and Means Committee Chairman Richard Neal, D-Mass. Neal spoke with Treasury Secretary Steven Mnuchin and IRS Commissioner Charles Rettig about the upcoming filing season on January 7. Neal was reportedly told during the call with Mnuchin and Rettig that the IRS will bring in furloughed employees (without immediate pay) to assist in processing refunds. Neal sent Mnuchin and Rettig letters last week inquiring about the IRS’s ability to handle tax reform implementation and the 2019 tax filing season.

2019 Tax Filing Season

While the IRS is expected to soon release its plan to move forward with this year’s filing season and issuing refunds, the strategy does not circumvent the need to fund the agency, according to Neal, “These developments are no substitute for funding the government and fully reopening these agencies,” Neal said in a January 7 press release. “On Wednesday, the House will pass the Financial Services and General Government appropriations bill that will fund Treasury and the IRS, and I urge the Senate to move the legislation swiftly to President Trump’s desk for his signature.”

Government Shutdown

Since before the shutdown began on December 22, Democratic leadership and President Donald Trump have been at odds over Trump’s requested border security funding. Trump has maintained that he will not sign a government appropriations measure without the specific Homeland Security funding he has requested. Similarly, Democratic leadership will not budge on their refusal to meet his demands. At press time on January 7, there was little to no optimism on Capitol Hill that the partial government shutdown could soon come to an end.

By Jessica Jeane, Senior News Editor

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