IRS will pay tax refunds even if government shutdown continues, official says

WASHINGTON, D.C. — UPDATE 3:50 p.m. Jan. 7: The Internal Revenue Service will issue refunds to taxpayers even with the government shutdown entering its 17th day.

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"Tax refunds will go out," Russell Vought, the acting director of the White House Office of Management and Budget, told reporters at a Monday news briefing, according to Bloomberg.

The news comes as there was an expectation that tax refunds would be delayed if the shutdown went into tax filing season.

Original report: With a partial government shutdown now in its second full week with no end in sight and tax season quickly approaching, the impasse could impact tax refunds.

While the Internal Revenue Service, one of the agencies impacted by the shutdown, continues to collect Americans' money, it generally doesn't issue tax refunds during a government shutdown, according to The Wall Street Journal.

The agency, which is now operating on a thin staff, had a five-day contingency plan for a shutdown, but the closure has now stretched beyond the IRS' plan.

Despite the shutdown, the agency continues some operations, including protecting government property, processing some tax returns, continuing criminal investigations and maintaining computer systems, the Journal reported.

What won’t happen during a shutdown are audits, responses to taxpayers’ questions and tax refunds.

"We're in uncharted territory as each day gets longer," Jackson Hewitt Tax Services chief tax officer Mark Steber told the WSJ.

If the impasse is resolved before mid-January, the traditional start of tax season, it most likely won’t have a major impact on early tax filers and, even if the shutdown continues, once the IRS begins accepting tax returns, people can begin filing. But they won’t get a refund until the government reopens, which could put pressure on the Trump administration to end the impasse.

The IRS has not yet announced the start date for the 2019 tax filing season, but it typically begins by late January.

The government partially closed down on Dec. 22 when President Donald Trump refused to sign a spending bill that did not include $5 billion for a border wall with Mexico, one of his campaign promises, and House Democrats refused to agree to a bill that included money for a border wall, saying border security was a separate issue.

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