January 9, 2019 / 6:46 PM / 6 days ago

U.S. House Democrats may look into whether shutdown delays IRS tax refunds

WASHINGTON (Reuters) - Democrats in the U.S. House of Representatives are considering holding hearings on the impact of the partial government shutdown on the Internal Revenue Service, with a focus on its ability to get refunds to taxpayers on time, a top lawmaker said on Wednesday.

FILE PHOTO: Rep. Richard Neal (D-MA) looks on prior to a House Ways and Means Committee markup of the Republican Tax Reform legislation on Capitol Hill in Washington, U.S., November 9, 2017. REUTERS/Aaron P. Bernstein/File Photo

Representative Richard Neal, chairman of the tax-writing House Ways and Means Committee, told reporters he wanted to be sure that the IRS begins to accept tax returns on Jan. 29, as scheduled, and that refunds go out in a timely manner.

“We’re talking about (hearings) right now. The leadership and I have discussed it in the last couple of days,” the Massachusetts Democrat said.

This year’s deadline for tax filings is April 15, as usual. Each year, the IRS’s 80,000 employees process about 150 million tax returns and issue about 108 million refunds, despite having experienced repeated budget cuts in recent years.

But the partial shutdown, triggered by President Donald Trump’s demand for $5.7 billion for a U.S.-Mexico border wall, has furloughed nearly 70,000 IRS employees.

The White House said this week the tax agency would somehow process returns and distribute tax refunds. Details of how that would be done were not provided.

Russell Vought, acting director of the White House Office of Management and Budget, told reporters: “Tax refunds will go out.”

Any delays in refunds - eagerly anticipated by millions of Americans - could be a political problem for Trump. Already, a growing proportion of Americans blame the Republican president for the partial shutdown, which has affected about a quarter of the federal government.

The National Treasury Employees Union, which represents IRS and other federal workers, sued the government on Wednesday, saying employees should not be forced to work without pay during the shutdown. The suit said it was “substantially likely” the government would order IRS employees back to work to process tax refunds.

House Democrats on Wednesday were engulfed in legislative efforts to end the 19-day-old shutdown and were not expected to fully empanel oversight committees, including Neal’s, until late next week, meaning any hearings may have to wait for now.

Neal first raised concerns about the shutdown’s impact on the IRS last week, in a letter to IRS Commissioner Charles Rettig and Treasury Secretary Steven Mnuchin.

He later spoke to the two officials by phone.

“It was pretty clear that when the conversation took place with the IRS commissioner and the secretary of the Treasury, that we want these refunds to go out on time,” Neal said on Wednesday.

“I’m told that the tax filing season opens still on Jan. 29. So we’re going to be raising questions about that during the course of the next few days, to make sure that’s adhered to.”

Neal said the average tax refund last year was $2,800, money that many families rely on to help pay for rent, food and child care. He has also expressed concern that mortgage lenders will be unable to obtain tax transcripts to verify income for loans.

Reporting by David Morgan; Editing by Kevin Drawbaugh and Peter Cooney

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