FAA Shutdown: Confusion Over IRS Refunds Continues

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UPDATE, 8/5: While the Senate will vote on a bill to end the shutdown, travelers who have been confused about that 7.5% tax will probably continue to struggle to figure out just what they owe or what the government owes them.

CNN, however, has come up with some ideas for befuddled passengers. If you bought your ticket through a travel agent, ask him or her for help getting a refund (but wait until you've completed your trip). If you booked through the airline, talk to them (even though they seem to have little grasp about what's exactly happening). In other words, CNN says, you are owed money in some capacity, so until this whole shutdown is completed and through, keep your travel documents and stay on top of the news.


Original text, 7/28: As the FAA shutdown heads into its sixth day, the IRS is asking airlines to refund taxes to fliers who bought plane tickets before last weekend and are now taking to the skies.

The shutdown, which is costing the FAA $30 million in lost revenue per day, has stalled airport projects across the country, leaving some 4,000 workers temporarily unemployed.

The IRS said on its website that airlines, though not required, can refund the taxes to passengers. American, United/Continental and Southwest are all directing customers to seek refunds with the IRS. JetBlue is asking customers to email the airline for a refund, the Associated Press reports.

The IRS states: "Passengers who paid for tickets on or before July 22, 2011, for travel beginning on or after July 23, 2011, may be entitled to a refund of the tax. Airlines are permitted to refund the tax to the passenger, just as they do in the ordinary course of business when issuing refunds for unused refundable tickets (including the associated taxes)."


It was reported on July 24th that several airlines had raised ticket prices to compensate for the tax loss, including American, United, Continental, Delta, US Airways, Southwest, AirTran and JetBlue. Delta told reporters on Wednesday that they are collecting between $4-$5 million extra per day, the Atlanta Journal-Constitution reports.



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