IRS Won't Issue Refunds During Shutdown: That Could Be A Problem

While most Americans thought they wouldn't be affected by the partial government shutdown, anyone with a federal tax refund coming to them will have to wait until the stalemate is over, according to the Wall Street Journal.

As one of the agencies which now lacks funding, the IRS and the US tax collector are operating with roughly 1/8 of their usual staff under a shutdown plan it's operating under outside the tax-filing season.

During a shutdown, the IRS can continue activities that protect government property, and the agency may bring in more workers soon to prepare for the income-tax filing season. Even during a shutdown, the agency still processes some tax returns that include payments, keeps computer systems running and continues criminal investigations. But the IRS generally doesn’t conduct audits, respond to taxpayer questions outside the filing season or—brace yourself—pay refunds.

A shutdown that gets resolved within a few weeks would have little ultimate effect on taxpayers, but lawmakers have made little or no movement toward a deal. That stalemate raises the prospect of an unprecedented extended closure during the individual income-tax filing season, which typically starts in mid-to-late January. The IRS hasn’t announced a start date yet for the 2019 filing season, the first under the tax law that Congress passed in 2017. -WSJ

"We’re in uncharted territory as each day gets longer," said Mark Steber, chief tax officer at Jackson Hewitt Tax Service Inc.

This means that early filers won't receive their expected refunds - which may put pressure on President Trump and congress to hammer out a deal. President Trump says he won't sign any legislation that doesn't include $5 billion for his border wall, while Congressional Democrats say that's not happening.

If last year's tax refund figures are any indication, there are potentially hundreds of billions of dollars on the line for more than 55 percent of US households.

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