U.S. lawmaker seeks answers on shutdown's effect on tax filings

WASHINGTON (Reuters) – A senior U.S. lawmaker asked the Internal Revenue Service and the Treasury Department on Friday how the ongoing partial government shutdown would affect the processing of income tax filings and refunds this year.

Representative Richard Neal, a Democrat who is the new chairman of the House of Representatives tax-writing committee, expressed concern that the IRS, the U.S. tax agency, has already furloughed most of its work force and stopped issuing tax refunds since the partial government shutdown began Dec. 22.

President Donald Trump is withholding his support for a bill that would fully fund the government until he secures $5.6 billion for a wall on the U.S.-Mexican border. As a result, about 800,000 federal workers have been unpaid due to the closure of about a quarter of the federal government.

Neal wrote to Charles Rettig, the head of the IRS, and Treasury Secretary Steven Mnuchin to request information about how the shutdown will affect the IRS’s ability to process tax returns and provide refunds.

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“I understand that the IRS furloughed nearly 70,000 IRS employees (87.5 percent of the workforce), ceased needed taxpayer services, and stopped issuing tax refunds during the government shutdown,” Neal wrote. “These actions are causing undue hardship to American taxpayers and the IRS civil servants.”

An IRS spokesman, Matt Leas, declined to comment on the letter.

The average tax refund last year was $2,800, money that many families rely on to help pay for rent, food and child care, Neal said in the letter. He also noted that another problem for taxpayers is that as the shutdown continues, mortgage lenders will be unable to obtain tax transcripts to verify income for loan.

The U.S. tax filing season normally starts early in the year, ahead of the April 15 deadline for filing income tax returns. Neal asked the IRS when the filing season would launch this year, noting that in 2018 the IRS announced on Jan. 4 that it would start accepting tax returns on Jan. 29.