Government Shutdown May Delay Income Tax Refunds 7 January 2019

10 January, 2019, 04:42 | Author: Eric Barnett
  • Bloomberg News

Despite the IRS operating on a skeleton staff and being subject to the partial government shutdown, and contrary to longtime shutdown policy, the White House said Monday that tax refunds will be paid this year even if the shutdown extends for several more weeks.

Prior to today's announcement, the IRS had said that tax refunds were among the agency's "non-excepted activities" that are impacted by a shutdown and therefore not carried out.

"Tax refunds will go out", acting director Russell Vought told reporters at a Monday briefing.

According to IRS data through April 2018, the IRS processed over 130 million individual tax returns and issued close to 100 million refunds that totaled $275 billion.

House Democrats have made a few attempts of their own to end the shutdown.

The partial government shutdown began over a dispute about border wall funding on December 22.

Final decisions were still being worked out, including how many people would be brought back to work at the IRS and when the tax filing season will begin.

However, tax returns will be filed under the Tax Cuts and Jobs Act signed in 2017.

OMB determined that paying tax refunds was an "indefinite appropriation", and not something that needed annual congressional approval.

Paying these tax refunds could help the White House avoid an enormous political and economic mess next month.

The IRS might recall a large number of furloughed employees to process returns - probably without pay - in accordance with its usual contingency plans.

As the government shutdown continues some people are wondering how much longer it will last and if it will affect their tax return. A delay in refunds would cause hardship, particularly to those American workers and families who live paycheck to paycheck.

A 1040 tax form appears on display, Tuesday, Jan. 10, 2017, in NY.

As the Federal government shutdown enters its third week, if it's not resolved soon, there's a risk that it could stop tens of billions of dollars worth of income tax refunds.



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