As government shutdown looms, taxman still knocks

WASHINGTON Tue Apr 5, 2011 4:57pm EDT

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WASHINGTON (Reuters) - As the government moves to the brink of a shutdown with budget talks stalled, taxpayers should remember one thing as tax day nears: tax collection may be considered "essential."

Internal Revenue Service Commissioner Douglas Shulman last week told a congressional hearing he was in talks with the White House budget agency about contingency plans in the event of a government shutdown.

Taxes are due this year on April 18.

Lawmakers and the Obama administration continued talks on Tuesday to avert a shutdown, racing against expiration of a temporary government funding measure that ends this Friday, April 8.

When the IRS Commissioner was asked about the potential for a shutdown last week, talks seemed productive.

"Everybody is hopeful that there won't be a shutdown," Shulman said, noting negotiations between congressional leaders and the White House were ongoing.

In prior shutdowns, the most recent of which occurred in 1995 and 1996, checks from taxpayers were collected - but refunds stopped. Still, prior shutdowns occurred during the months of November and December through January, not the tax-frenzied month of April.

An IRS spokeswoman could not speculate on how the agency would handle a shutdown this time.

Though refunds could be stalled, a 2011 Congressional Research Service report listed tax collection as an "essential" activity.

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