ABC Source: White House will order IRS to pay income tax refunds despite government shutdown

In this Aug. 19, 2015, file photo the Internal Revenue Service Building in Washington. Photo: AP Photo/Andrew Harnik, File
In this Aug. 19, 2015, file photo the Internal Revenue Service Building in Washington.

January 07, 2019 04:28 PM

The White House will order the IRS to pay income tax refunds despite the government shutdown, a senior administration official told ABC News.

The IRS has sent close to 90 percent of its workforce home without pay due to the government's partial shutdown, according to a contingency plan published by the agency in December.


IRS offices are closed, tax questions are not being answered and there was a concern that refunds to early-filers this year might not be issued on time if the shutdown drags on, financial experts said.

KSTP's Government Shutdown Coverage

Having lost 23,000 employees since 2010, the IRS was already short on staff and adequate training, according to Tony Reardon, president of the National Treasury Employees Union, which represents IRS workers. And because IRS employees are still working to implement the Tax Cuts and Jobs Act of 2017 -- a sweeping tax reform bill spearheaded by congressional Republicans and the Trump administration -- questions from tax preparers and taxpayers about new tax rules and forms abound. With one month before the usual IRS filing season begins, Reardon said the IRS now faces the looming question of whether it is prepared to handle the bureaucratic backlog, assuming their furlough ends soon.

An existing IRS contingency plan laid out how the agency would run during a shutdown through Dec. 31. Since that plan has expired, the IRS has said that it expects to update that contingency plan soon. It originally called for agency officials to meet throughout the course of the shutdown to determine if employees needed to be brought back to work, without pay, to keep up with some of its functions.

The IRS directed ABC News to the lapsed contingency plan in response to further questions. Calls to the Treasury Department have gone unanswered.

In the meantime, some IRS employees continue working to implement the new tax plan, which contained its own funding for two fiscal years.

More from KSTP:

President Trump to head to border as shutdown continues

Democrats plan more pressure on Trump to reopen government

Worries grow about impact of a prolonged government shutdown

Some 12.5 percent of IRS employees have been working through the shutdown because they are classified as serving "in the protection of life and property." These are personnel who keep computer systems running, protect federal property, conduct criminal investigations and take care of other essential tasks.

"Relevant authority has established that tax revenues constitute Government property which the Service must safeguard during a lapse in appropriations," according to the IRS.

This means that adding to the activities above, the agency will continue collecting taxes throughout the shutdown.

During the 2013 government shutdown, almost $4 billion in tax refunds were delayed, according to a report from the Office of Management and Budget at the time.

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