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White House says IRS will pay tax refunds despite partial government shutdown

WASHINGTON -- With the government shutdown in its third week and concern mounting over a possible delay in tax refunds, an official with President Donald Trump's administration said Monday, Jan. 7 that taxpayers who are owed money will be paid on time.

Russell Vought, acting director of the White House budget office, said customary rules will be changed to make the payments possible. He told reporters Monday that an "indefinite appropriation" was available for the refunds, which would go out as normal.

The partial government shutdown couldn't have come at a worse time for the Internal Revenue Service. Tax-filing season opens soon, and while those who owe Uncle Sam will likely still have to pay up by April 15, people who were due money back have been worrying about a delay if the closure persists.

About three-quarters of taxpayers receive annual refunds, giving them an incentive to file their returns early. Many lower-income people count on refunds as their biggest cash infusion of the year.

The IRS might recall a large number of furloughed employees to process returns — probably without pay — in accordance with its usual contingency plans. Still, hundreds of billions in refunds would likely still be delayed because funding wouldn't be available, under current rules.

Some experts question whether the Trump administration has the legal authority to reverse earlier policies to allow government money to flow into refunds during a shutdown.

Vought framed the move as part of President Donald Trump's goal to make the shutdown "as painless as possible."

The administration's announcement came as U.S. House Speaker Nancy Pelosi, now wielding majority control of the House, signaled her intention to begin passing individual bills to reopen federal agencies in the coming days — starting with the IRS' parent Treasury Department to ensure Americans receive their refunds.

Some Senate Republicans have been growing increasingly anxious about the extended shutdown and could support such legislation from the Democratic-led House.

With the White House announcement on refunds, "They're reversing a long-standing legal position," said Howard Gleckman, senior fellow and tax expert at the Urban Institute. But, he added wryly, "Who's going to sue? It would be hard to show damages. ... So they might be able to get away with it."

A senior administration official cited a 2011 position of the chief counsel at the IRS that such payments are legally allowed during a shutdown.

The official spoke on condition of anonymity because they weren't authorized to speak publicly to reporters.

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