Senate Democratic Tax Writer Questions IRS, Treasury on Legality of Employee Recall

Senate Finance Committee (SFC) member Sen. Mark R. Warner, D-Va., has asked the IRS and Treasury for its legal justification in recalling furloughed employees for the 2019 tax filing season.

The IRS recently announced that it would recall close to half of its furloughed workforce to process tax returns and refunds, among other things. Treasury and the IRS have been partially shut down, along with other federal agencies, since December 22, 2018.

Tax Refunds

“While the payment of tax refunds are provided through a permanent, indefinite appropriations, the IRS workers who process them are not,” Warner wrote in two January 22 letters to Treasury Secretary Steven Mnuchin and IRS Commissioner Charles Rettig. “Unlike other federal employees who are not getting paid, it has been reported that Treasury is using a highly unorthodox method of temporarily funding the IRS clerks’ salaries through industry user fees, when they are normally funded through congressional appropriations,” Warner wrote to Mnuchin.

Warner asked Mnuchin and Rettig for the legal basis on which Treasury and the IRS recalled employees for certain operations. Congress’s power of the purse (federal agency appropriations) and the Anti-Deficiency Act authorize the payment of federal employees, neither of which apply to those employees recalled for the filing season, according to Warner.

Warner Questions White House’s Role

The White House reportedly directed the IRS to issue refunds amidst the ongoing shutdown, despite prior precedence that refunds are not issued during shutdowns. Additionally, other IRS user fee-based operations have been restarted.

“It is important that the [Trump] Administration respect the proper roles of each branch of government, particularly Congress’s power of the purse, as well as the laws that Congress has passed,” Warner wrote. “The current situation should not give the Administration license to substitute its own determination of proper spending priorities for that of Congress…,” he added.

2019 Tax Filing Season

The 2019 tax filing season is set to begin on January 28. Because of the partial government shutdown, the IRS expects to have only 57.4 percent of its workforce on board throughout the filing season.


In related news, the House Ways and Means Committee is scheduled on January 24 to examine the effects of the partial government shutdown on taxpayers and the 2019 tax filing season. Mnuchin was invited to testify at the full committee hearing but declined the invitation.

However, House Ways and Means Committee Chairman Richard Neal, D-Mass., and Mnuchin reportedly spoke by phone on the evening of January 23. At press time that evening, the contents of the conversation were not yet released.

Senate Vote

In other news, the Senate is expected to take up a Republican government funding bill on January 24, which includes various bipartisan and Democratic-favored proposals. However, Democratic leadership in both chambers have already denounced the measure. Likewise, the Democratic-controlled House continues to pass government funding bills, all of which are considered “dead on arrival” in the Senate.

By Jessica Jeane, Senior News Editor

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All stories by: CCHTaxGroup