U.S. tax agency to bring 46,000 furloughed workers back

WASHINGTON (Reuters) - The U.S. Internal Revenue Service said on Tuesday it intends to bring back more than 46,000 workers furloughed by the partial shutdown of the federal government to process annual tax returns and refunds and other tasks.

FILE PHOTO: A general view of the U.S. Internal Revenue Service (IRS) building in Washington May 27, 2015. REUTERS/Jonathan Ernst/File Photo

The federal tax agency, part of the Treasury Department, said in a shutdown contingency plan that the employees, about 57 percent of its 80,000-member workforce, would be designated “excepted or exempt” from the shutdown.

The 2019 tax filing season is set to begin on Jan. 28, with Americans having until April 15 to file their obligatory annual tax returns. Furloughed IRS employees returning to work will not be paid until government agencies reopen.

The shutdown, which began with President Donald Trump’s demand for $5.7 billion in funding for a wall along the U.S.-Mexico border, is now in its 25th day.

Trump and Democrats in Congress show no signs of budging, raising the prospects of a lengthy impasse that could leave the president and his Republican allies in Congress vulnerable to public criticism, especially if annual taxpayers’ refunds - which many people rely on financially - are delayed.

The 132-page IRS contingency plan sets out a legal rationale for handling returns and refunds during a shutdown, saying those operations are similar to Social Security payments that are unaffected by the disruption.

But the agency will not perform audits and other key functions until Trump and Congress agree on funding to reopen the one-quarter of the government affected by the shutdown, according to the document.

The administration’s plan is already the target of a lawsuit by the National Treasury Employees Union (NTEU), which claims the plan is illegal because it obligates funds that have not been appropriated by Congress.

Democrats in the House of Representatives are also considering hearings on the shutdown’s impact on the IRS, including the agency’s ability to deliver tax refunds on time.

“There is no doubt the IRS needs to get ready for the 2019 filing season that starts Jan. 28, and IRS employees want to work,” NTEU National President Tony Reardon said in a statement.

“But the hard, cold reality is that they’ve already missed a paycheck and soon they’ll be asked to work for free for as long as the shutdown lasts.”

Reporting by David Morgan; Editing by Bill Rigby