In an announcement that will be very welcome news to the credit and collection industry, the Internal Revenue Service announced yesterday that income tax refunds will still be mailed out even if the government shutdown continues.
There had been concerns that the tax agency would not mail out refund checks until the shutdown was ended. Such a delay could impact the plans of collection agencies across the country, which count on income tax refunds to provide individuals with some extra cash to pay past-due bills.
Tax returns will start being processed on January 28 and refunds will be mailed out as scheduled, the agency announced.
“We are committed to ensuring that taxpayers receive their refunds notwithstanding the government shutdown. I appreciate the hard work of the employees and their commitment to the taxpayers during this period,” said IRS Commissioner Chuck Rettig, in a statement.
The IRS typically does not mail out refunds, conduct audits, or offer help to taxpayers during a shutdown. But the agency will be recalling a “significant number” of workers who have been furloughed during the shutdown. About 12% of employees at the IRS are currently still working during the shutdown.
The White House Office of Management & Budget has made the decision to allow refunds to be processed, based on a memo written eight years ago by the IRS, which argued in favor of the position. At the time, the general counsel for the OMB disagreed with the IRS’s position, but the memo was re-submitted to the OMB by the IRS last week and was approved.
