The agency is divided over whether it has the legal authority to both summon furloughed employees back to work to process the refunds. | Mandel Ngan/AFP/Getty Images Government Shutdown Tax refunds will go out during shutdown, White House official says

The Trump administration has decided that tax refunds will be disbursed this year as scheduled despite the partial government shutdown.

The announcement Monday, which reverses previous policy — and surprised some in the administration’s own Treasury Department — means millions of Americans should not see a delay in their refunds even though thousands of IRS employees have been furloughed.


“Tax refunds will go out,” acting White House budget director Russ Vought told reporters Monday afternoon.

The decision is aimed at heading off the possibility of antagonizing millions of Americans who rely on their refunds — politically perilous for lawmakers now entrenched in a battle over President Donald Trump's demands for billions in border wall funding.

House Democrats have been fanning concerns over refund delays, scheduling a vote this week on legislation to fund the IRS.

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In a statement, House Ways and Means Chairman Richard Neal (D-Mass.) said: “I look forward to seeing a more detailed description of how the agency will carry out these operations, particularly what will be expected of Treasury and IRS personnel.”

“These developments are no substitute for funding the government and fully reopening these agencies,” he added.

The IRS is making plans to recall thousands of workers, a senior administration official said. Tax-filing season will open Jan. 28, the agency said.

"We are committed to ensuring that taxpayers receive their refunds notwithstanding the government shutdown," said IRS Commissioner Charles Rettig.

The OMB announcement came even as the Treasury Department had been knee deep into a legal analysis looking at whether the government had the power to issue the refunds amid the budget impasse.

Some in the Treasury Department don’t believe it has the legal authority to summon furloughed workers back to the office and begin distributing payments.

The concern is that “you can’t have everybody come in and work because it’s illegal to incur an obligation on the part of the federal government that’s not authorized and appropriated” by Congress, a senior administration official said.

“And, similarly, to start writing checks — if it’s not authorized and appropriated, it’s a problem.”

Previous administrations have decided they didn’t have the power to issue refunds during a shutdown.

Tax filing season usually begins in late January, with payments going out the door soon thereafter.

More than 70 percent of taxpayers typically get money back at tax time, and speedy refunds have long been considered sacrosanct by the public and the IRS alike.

For many people who use refunds as a sort of savings account, it is the largest single payment they receive all year. Low-income people who rely on government payments through the Earned Income Tax Credit program tend to file early, and would be particularly vulnerable to any delays.

Vought said the decision is intended to make the shutdown “as painless as possible, consistent with the law.”