A Reversal Of Fortunes – The IRS Gets To Send Refunds During Shutdown
Taxpayers will be relieved to know that the White House has given the IRS the green light to send refund checks even during the government shutdown.
Typically refunds are not issued during government shutdowns as I mentioned in this month’s blog which I wrote before the reversal went into effect. According to The Washington Post, “The White House on Monday directed the Internal Revenue Service to pay tax refunds to millions of Americans during the federal shutdown, marking its most dramatic reversal yet of past legal precedent as officials scramble to contain public backlash from the funding lapse.”
Delayed Refunds Considered Inconvenient Not Life-Threatening
It is without doubt a complicated situation that is making tax season even more complicated this year. Many taxpayers depend on their tax refunds to pay down debt often incurred during the holidays. Others earmark their returns for bigger items like appliances and other expenditures. However, the government doesn’t recognize the delaying of tax refunds as life threatening. This is why this reversal may actually be an illegal move. According to the Washington Post, “Sam Berger, who worked in the general counsel’s office at the Office of Management and Budget during a shutdown under the Obama administration, said the decision reverses years of precedent and runs contrary to the Antideficiency Act, the law establishing that federal agencies cannot spend money that has not been authorized by Congress.”
He went on to say that if the decision is found to violate that Act, it could carry fines or criminal penalties. But that is an issue for someone else to unravel. Meanwhile, other government funded programs like Social Security are paid during government shutdowns because non-payment would be considered life threatening.
Why Refunds Are Not Paid During Government Shutdowns
Here’s why refunds are typically not paid during government shutdowns. It’s not because there is no money. There’s plenty of money to pay tax refunds but there’s no money to pay the IRS employees who have to send them out. You see, Congress has to appropriate funds to pay IRS employees and they haven’t done that. It’s kind of awful to know that the IRS employees who are brought back to handle the tax refunds will not be getting paid until the shutdown ends. Now, that’s something to think about. Who likes to work for nothing? Sure, they’ll get paid once the shutdown ends, but in the meantime, they get nada.
File Your Tax Returns Before Someone Changes Their Mind Again
So, this may be a good reason to get your tax returns filed as quickly as possible. You just never know if the reversal will be reversed and the powers that be decide not to issue refunds after all.
It’s always a good idea to get your taxes filed sooner rather than later for a number of reasons. One of the best reasons is that the scammers tend to act quickly, so you want to beat them to the punch and file before they use your information to file taxes in your name. Another reason is that it feels good to get that behind you. If you need help filing or dealing with a complicated tax issue, such as owing the IRS money, give us a call. We’ll be working to help clients resolve their issues right through the government shutdown.