The debt ceiling battle could delay tax refunds this year, sinking many family budgets, crimping spending and hampering an already anemic economic recovery.
The federal government has already reached its debt limit, and the Treasury Department is taking "extraordinary measures" to meet debt payments. By mid-February or early March, the Treasury will run out of ways to cover debts and could begin defaulting on government loans.
Tax refunds may be one of the first casualties, as the government first pays interest on debt.
Editor's Note: Use This Single Loophole to Pay Zero Taxes in 2013
"It's probably reasonable to assume there will be some delay," Steve Bell of the Bipartisan Policy Center, a think tank in Washington, told CNBC.
February is typically a busy month for filing tax returns, since taxpayers expecting refunds file as early as possible. Many taxpayers count on their refunds to balance family budgets. Others spend their refunds, stimulating the economy.
Tax refunds have already been delayed. The IRS said it would start processing returns on Jan. 30, eight days later than usual, because it needs time to update its computer programs to take into account tax code changes in Congress's fiscal cliff package.
The government doesn't have to pay interest on tax refunds until 45 days after the tax-filing deadline, April 15, meaning refunds could be postponed until the end of May, according McClatchy Newspapers. However, the agency is more likely to delay the larger refunds sought in February and March.
And it might quietly delay refunds without publicity.
The government is committed to about $452 billion in spending and expects about $277 billion in revenue between mid-February and mid-March, reports McClatchy Newspapers, citing the Bipartisan Policy Center.
It expects to send out about $86 billion in refunds between Feb. 15 and March 15, the center estimates, so delaying refunds only won't make up the shortfall.
Editor's Note: Use This Single Loophole to Pay Zero Taxes in 2013
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