WASHINGTON — The Trump administration will direct the Internal Revenue Service to issue tax refunds during the ongoing federal government shutdown, reversing previous policy, officials said Monday.
“Tax refunds will go out,” Russell T. Vought, acting director of the White House Office of Management and Budget, told reporters in an afternoon briefing.
In a call with the chairman of the House Ways and Means Committee, Rep. Richard E. Neal, D-Mass., Treasury Secretary Steven Mnuchin said the administration will call back a number of IRS employees from furlough to issue refunds. Mnuchin also told Neal that the IRS would open the tax filing season on time at the end of January, and that enough employees would return to work to allow the IRS to answer 60 to 70 percent of phone calls seeking tax assistance.
The move to issue refunds seeks to circumvent a potential political problem for the Trump administration by allowing taxpayers to claim refunds despite the government shutdown, which is already dragging into Day 17.
Millions of taxpayers who typically file for refunds at the beginning of the year have been unsure when they will get their money back from the IRS. Under previous shutdown plans — and interpretations of federal law — the IRS was prohibited from dispensing tax refunds when Congress has not approved money to fund the Treasury Department, as is the case now.
By Feb. 2 last year, the earliest point in the IRS’ 2018 statistics, 18 million individual returns had been filed with the agency. The IRS had issued more than 6 million refunds, totaling $12.6 billion — an average refund of $2,035.
Administration officials have been looking for ways to ensure refunds could go through, even if President Donald Trump and congressional Democrats fail to resolve their dispute over whether to fund construction of a wall on the United States’ southern border.
Democrats on the House Ways and Means Committee said they began to see indications over the weekend that the White House was looking for a legal justification to allow refunds to be issued. But committee lawyers believe the law prohibits such a move.