White House orders IRS to pay income tax refunds despite government shutdown


The IRS announced Monday evening that despite the government shutdown, it will process tax returns starting Jan. 28 and issue tax refunds as planned, a move ordered by the White House earlier in the day.

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 — prior to Monday’s announcements — 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.

Russ Vought, acting director of the Office of Management and Budget, told reporters Monday afternoon that the administration would be updating guidance from past shutdowns in order to allow for tax returns to be fulfilled during the ongoing partial shutdown. He announced the move as part of a broader set of steps the administration is taking to mitigate the impact of the shutdown on ordinary people. At the national parks, trash collection and bathroom cleaning is set to restart this weekend, he said. The National Park Service will use money collected from entrance and usage fees in previous years to pay for those services and increased law enforcement.

“Our mission from the president is to make this shutdown as painless as possible, consistent with the law,” Vought said.

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.

Also on Monday, the NTEU announced that it had filed a lawsuit against the government for forcing some federal employees to work without pay. This is the second lawsuit filed on behalf of federal workers.

Under government rules for a shutdown, employees deemed essential must cancel any planned leave and report to work. But they typically won’t get paid until after the shutdown ends and Congress agrees to give them backpay.

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.

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.

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.

ABC News’ Jordyn Phelps, Stephanie Ebbs and Anne Flaherty contributed to this report.

Categories: National News, News, Politics