The voices of Tax Policy Center's researchers and staff
There’s surely a long list of reasons to keep the Federal government open. Here’s one: If a government shutdown forces the IRS to furlough staff—as it has in the past—last-minute tax filers may have to wait longer for their refunds. Analysts at the Center for American Progress (CAP) estimate that a two-week government shutdown would hold up nearly $8 billion in refunds for roughly 2.5 million families. This would come on top of congressionally imposed early season delays affecting a few million returns that claimed the earned income tax credit (EITC) or additional child tax credit (ACTC).
In years past, low- and moderate-income families were quick to file, often when tax season first opened in January. By the first week of February in the 2014 – 2016 filing seasons, the IRS had already processed over 17 million returns – sending out average refunds of about $3,300. But this year, after Congress slowed the processing of returns that reported the EITC or ACTC, fewer than 7 million had been processed by the first week of February.
Over the course of the filing season, tax filing has mostly caught up with the prior year. As of April 7 (the latest data available), almost 101 million returns had been processed. But now another bump may throw the IRS off course.
While nearly all returns were filed by Tuesday’s deadline, a government shutdown next week could force the IRS to furlough staff and slow refunds. According to the CAP report, the last government shutdown sent more than 90 percent of IRS workers home – something that would presumably happen again should Congress fail to pass a spending bill next week.
Government shutdowns are usually about how the government spends money. But given its timing, this one, it might also affect the way you pay your own bills, especially if you were counting on that refund.
Posts and comments are solely the opinion of the author and not that of the Tax Policy Center, Urban Institute, or Brookings Institution.
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