Treasury and IRS try to reassure taxpayers about shutdown

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Treasury Secretary Steven Mnuchin attempted to salve worries about the federal government’s partial shutdown amid concerns about a tanking stock market and the start of tax season.

“We continue to see strong economic growth in the U.S. economy with robust activity from consumers and business,” Mnuchin said in a statement Sunday. “With the government shutdown, Treasury will have critical employees to maintain its core operations at Fiscal Services, IRS and other critical functions within the department.”

The Treasury Department said Mnuchin had conducted a series of calls Sunday with the CEOs of the nation’s six largest banks, and they confirmed they had ample liquidity available for lending to both the consumer and business markets and all other market operations. The bank leaders also confirmed to the Treasury that they have not experienced any clearance or margin issues and that the markets continue to function properly. Nevertheless, the statement led to fresh concerns among many investors Monday morning as stock indexes continued to decline.

During an IRS Security Summit press conference on December 12 before the shutdown, Kenneth C. Corbin, the commissioner of the IRS’s Wage and Investment division, said the agency is still planning to open the filing season on time, although an official start date has not yet been announced as the IRS continues to adjust its systems to handle the new tax law and new tax forms.

“The IRS is making great progress moving towards the opening of the filing season,” said Corbin, in answer to questions from reporters about the threat of a government shutdown. “Each year, we test our programming and make sure we have the right guidance and instructions ready to go for a successful launch of the filing season. We are on track to be able to do that between January and February, and of course as soon as we have completed all of our testing, we’ll come out with a formal announcement for the opening of the filing season.”

With regard to the government shutdown, Corbin added, “The IRS is positioned along with Treasury to have the right personnel and staff available for us to continue with our on-time plans to be able to deliver and open the filing season, so right now we are tracking very well to have another successful filing season in 2019 as we did in 2018.”

Bloomberg News noted that the IRS typically issues refunds within 21 days of a tax return being filed. “If the shutdown were to extend into the filing season, or another one were to occur, refunds would be delayed, according to the agency’s shutdown plan,” wrote Laura Davison of Bloomberg News last week before the shutdown occurred. “Requests for disaster relief for victims of hurricanes or wildfires would continue to be processed, but audits would be paused.”

“There is a plan in place in the event that there is a loss,” said Corbin during the press conference. “That plan will have our critical staff available and ready to continue to plan for the filing season. We have flexibility within that plan, that if there are testing or other issues that may come up that we’re able to call and bring back necessary staff to make sure that they are available and able to address and open the filing season on time for 2019.”

The IRS's contingency plans in the event of a government shutdown were updated on Nov. 29, 2018 and can be found here.

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Tax season Tax planning Steven Mnuchin IRS Treasury Department