Latest on 2019 Tax Refunds

Latest on 2019 Tax Refunds

The IRS’s decided to begin this year’s tax filing season on time, and to start issuing tax refunds despite a partial government shutdown, appears legally sound, according to former government officials, but raises logistical questions from lawmakers and current agency employees.

Democratic lawmakers on Wednesday challenged the Trump administration’s attempt to ensure tax refund checks and food assistance programs stay running at otherwise shuttered agencies, and questioned whether keeping them operating under these conditions has made good on the White House’s promise to make the shutdown “as painless as possible.”

“There was a government shutdown, and they caused it, but they didn’t want the public to have to see that,” Rep. Gerry Connolly (D-Va.) said in a press conference Wednesday, referring to the IRS’s efforts to issue tax refunds and the Agriculture Department’s plan to pay outFebruary Supplemental Nutrition Assistance Program (SNAP) benefits before a Jan. 20 deadline.

“I think all of those are questionable activities. I think they further degrade morale in the federal workforce, and I don’t think the American public is fooled by it,” Connolly added.

 

Sens. Ben Cardin (D-Md.) and Chris Van Hollen (D-Md.), in a letter Wednesday, asked IRS Commissioner Chuck Rettig to provide “as much certainty as possible to the IRS workforce on the agency’s plan and on what they can expect if the shutdown continues.”

“While the IRS’s announcement confirmed that tax filing season would begin later this month, we remain concerned that the disruption caused by the shutdown will cause prolonged delays in getting refunds out to American taxpayers,” the senators wrote.

On Monday, the Office of Management and Budget said the IRS would start issuing tax returns on Jan. 28, regardless of whether the shutdown continued for that long.

That decision, the IRS acknowledged, runs counter to the decision OMB made in 2011, when it directed the IRS not to pay refunds when a shutdown appeared likely, but was averted.

‘Longstanding exceptions’ to Antideficiency Act

So how can the IRS issue refund checks without lawmakers passing a spending bill?

A senior administration official explained the IRS has an “indefinite permanent appropriation” to issue tax refunds, even during a lapse in congressional funding.

“That means that Congress meant for those checks to go out — there’s money there always,” the official said in an interview Thursday.

Not paying refunds, even during a shutdown, he said, would be “thwarting the will” and intention of Congress.

“When the lapse in appropriations occurs, it doesn’t impede the actual funds that go into the tax refund. What it impedes is the discretionary budget that the IRS has to process the tax returns and take the administrative steps to issue a payment,” Danny Werfel, a former acting IRS commissioner, said in an interview Wednesday.

However, the question still remains: Does the IRS have a relevant exception to the Antideficiency Act, which prohibits agencies from spending funds that Congress hasn’t appropriated?

The law has several exceptions, notably “cases of emergency involving the safety of human life or the protection of property.”

The senior administration said multiple administrations have held the view it’s “necessarily implied”  agencies have the right to exempt more employees under a shutdown, as long as it involves indefinite permanent appropriations.

“There’s the law, and then there are exceptions to the law — longstanding exceptions to the law. There are judgment calls within those exceptions,” the administration official said.

Werfel also acknowledged that Trump administration officials and lawyers have a broad set of exceptions and legal language to interpret.

“It’s a really challenging determination for lawyers to make because the law doesn’t delineate each and every activity, what would stay open and what wouldn’t. It’s subject to interpretation,” he said. “You could go through and you could scrutinize every shutdown plan, and you could likely have a robust argument on many sides of the underlying legal questions, in terms of how to assess whether the exception should be triggered or not.”

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