The Internal Revenue Service is in “uncharted territory” as the specter of a prolonged government shutdown threatens refunds as the country approaches tax season.
The Wall Street Journal reported that the IRS is operating with only one-eighth of its normal employees because tax season hasn’t yet begun — and that pay refunds are one of their services that’s on the chopping block.
“A shutdown that gets resolved within a few weeks would have little ultimate effect on taxpayers, but lawmakers have made little or no movement toward a deal,” the Journal noted. “That stalemate raises the prospect of an unprecedented extended closure during the individual income-tax filing season, which typically starts in mid-to-late January.”
“The IRS hasn’t announced a start date yet for the 2019 filing season,” the report added.
While the lack of refunds could affect early filers, it’s less likely to do so for those in higher tax brackets.
“Wealthier filers generally have more sophisticated returns and file later so they should not be affected as much” Floyd Williams, a former senior IRS official, told the Journal.
Lower-income filers, meanwhile, “tend to file early in the season are taxpayers who count on large refunds to pay down debt, catch up on bills or make major purchases,” the report noted.
“We’re in uncharted territory as each day gets longer,” Mark Steber, chief tax officer at Jackson Hewitt Tax Service Inc., told the newspaper.