Tax Refunds Could Be Delayed If Shutdown Continues

With a new Congress sworn in and still no apparent end in sight for the partial government shutdown, the effects could soon hit hard for lots of people if elected officials are not able to come to some kind of compromise.

Funding has lapsed for nine federal agencies, including the Treasury Department, which means the Internal Revenue Service is operating under a contingency plan. The IRS has not yet said when the tax-filing season will begin. Last year, the season only kicked off towards the very end of January.

But as The Wall Street Journal and several others have pointed out, if the tax-filing season were to commence and the government was still shut down, federal tax refunds would be delayed. The IRS' contingency plan for operating during a government shutdown lists "issuing refunds" as a non-excepted activity, which means it is not something the agency will do during a shutdown. Other non-excepted activities include processing amended returns, audits and taxpayer services, such as responding to taxpayer questions during non-filing season.

However, the IRS contingency plan only addresses how the agency would function until Dec. 31. The plan also says that some of the non-excepted activities could include positions that may have to be recalled if the furlough continues for more than one week. And if the government reopens within the next few weeks, refunds would be processed without any delays.

Photo via Shutterstock