IRS To Process Tax Refunds Despite Shutdown, Date To Begin Filing 2018 Returns Still Undetermined

IRS Tax Return
A copy of a IRS 1040 tax form is seen at an H&R Block office on the day President Donald Trump signed the Republican tax cut bill in Washington, DC on December 22, 2017 in Miami, Florida. Kathy Pickering, vice president of regulatory affairs and executive director of The Tax Institute at H&R Block released a statement about the new tax bill saying, ' It's going to change the way you think about and plan your income taxes. You'll need to take a fresh look at your individual situation to know your outcome and new strategies to use to get the best tax outcome.' Photo by Joe Raedle/Getty Images

As the partial government shutdown heads towards the 17th day, the White House announced that the IRS will process tax returns despite approximately 90 percent of the agency's workforce currently on furlough.

During a Monday afternoon briefing, White House Office of Management and Budget Acting Director Russell Vought and Vice President Mike Pence spoke to reporters about the Trump administration's directions for the IRS.

"We have tried to make this as painless as possible consistent with the law," Vought said. "Tax refunds will go out."

However, because of the shutdown, the agency will be forced to work with around 12 percent of its workforce. Because of that, certain services provided by the IRS — such as answering questions from taxpayers and accountants — would be unavailable.

It could also slow down the time it takes for the IRS to process tax returns. Up to Nov. 23, 2018, the agency processed 154.4 million returns. Early bird filers — individuals who filed the first week that the IRS accepted 2017 returns — totaled 18.3 million returns and 6.1 million refunds.

Last year, the IRS began accepting returns on Jan. 29. No date to begin accepting 2018 returns has been announced.

However, Treasury Secretary Steven Mnuchin told the chairman of the Ways and Means Committee, Richard E. Neal of Massachusetts, that the IRS would be open by the end of January and be able to answer up to 70 percent of phone calls from filers with questions, the New York Times reports.

However, tax returns will be filed under the Tax Cuts and Jobs Act signed in 2017. The new code went into effect in 2018 and this season will mark the first time that filers have used it. Additionally, a 1040 form has been reduced to the size of a postcard and is expected to draw questions as people file 2018 tax returns.

Under previous government shutdowns, the IRS has not issued tax refunds. But as the shutdown drags on, several government agencies that have traditionally been closed have reopened or reappropriated funds for necessary services. Among them are reopening an IRS program to clear mortgage applications for USDA, FHA and VA loans and directing the National Park Service to tap into entrance and usage fee accounts to pay for trash pick up and bathroom clean up.

As the government shutdown drags on, Pence told reporters in Monday's briefing that the meetings held between the White House and Congressional leaders were impactful.

"We think it was a productive session on both days. I said so on Saturday, the president said so yesterday. That does not mean to imply that we made progress in negotiations, but I think we gained better understanding of the issues, the crisis on our southern border, and a better understanding of the priorities on both sides of the aisle," Pence said, according to CBS News.

"The simple fact is, if we can sit down and agree that there is a crisis, then plugging in the numbers into this process and reaching an agreement will not take very long."