The federal government will have to pay $200 million in taxes this year as lawmakers try to avoid having to write a new tax law by the end of March.
The IRS is expected to report on Thursday that the government will owe $18.4 billion in tax revenue on an adjusted basis, according to a Treasury Department estimate released Tuesday.
The agency will be able to take a $1.9 trillion tax cut in exchange for the revenue.
The Tax Foundation, a Washington, D.C.-based tax think tank, estimates that lawmakers will need to raise about $1 trillion in revenue by March 20 to avoid facing the $200 billion tax bill.
The government is still in the early stages of estimating how much revenue the tax cut will generate, but the nonpartisan Tax Policy Center estimated last week that the tax cuts could generate $1,600 per person, or about $200 per year.
In addition, the government has to cover $1 billion in losses it incurred in 2016 due to the economic downturn and uncertainty caused by the election of President Donald Trump.
In a statement Tuesday, Treasury Secretary Steven Mnuchin said Congress will need time to adjust the tax code to account for the tax changes.
“The Tax Code has changed and will need a little more time to make up for the $2 trillion of additional tax revenue that is expected in 2019,” Mnuchin wrote.
“We will be making adjustments in the tax system as needed.”
Taxpayers will also be able access to a variety of deductions and credits, which will be reduced or eliminated for people earning more than $200 a year.
They will also see a drop in their taxable income for the first time in 20 years.