The Internal Revenue Service (IRS) is facing significant challenges as taxpayers attempt to process their taxes during this filing season. With anticipated staffing cuts, taxpayers may find it increasingly difficult to reach IRS representatives via phone. This situation is expected to worsen next year, as planned workforce reductions threaten to significantly decrease the IRS’s operational capacity. Presently, data indicates that tax return processing times are consistent with previous years, yet the looming cuts could disrupt future tax seasons.
The Trump administration’s efforts to reduce the federal workforce are contributing to the IRS’s strained resources. Probationary employees within the IRS were ineligible for a buyout until after the April 15 filing deadline, resulting in the layoff of thousands of workers earlier this year. Legal experts in tax compliance predict that reduced staff will exacerbate the already lengthy wait times for reaching IRS phone support, as fewer employees handle an increasing volume of work.
The workforce reduction is part of a broader initiative under Elon Musk’s Department of Government Efficiency, which seeks to streamline government operations by closing agencies, laying off probationary employees, and offering buyouts through a “deferred resignation program.” Recent layoffs at the IRS could result in the departure of up to 20,000 staff members, approximately a quarter of the entire workforce. While a federal judge has ordered the reinstatement of about 7,000 laid-off probationary workers, it remains unclear if these employees have returned to their positions.
Despite the workforce challenges, tax processing figures compare closely year-over-year, with 101.4 million returns processed this year compared to 101.8 million last year. Notably, refunds have increased, with 67.7 million issued this year versus 66.7 million in 2024. However, concerns persist over the potential impact on the 2026 filing season as more staff may leave the agency through layoffs and buyouts.
Industry experts express skepticism about the IRS’s capacity to manage the tax filing season next year, given the expected further reductions. Delays in communication, particularly for those attempting to resolve collections issues, remain a significant worry. The IRS’s phone responsiveness traditionally slows during tax season, and without sufficient staffing, this problem could intensify.
The Bottom Line
The IRS’s staffing reductions have broad implications for taxpayers and the overall efficiency of federal tax processing. Individuals seeking assistance via phone may face prolonged wait times, potentially impacting their ability to resolve tax issues promptly. The anticipated cuts could lead to inefficiencies and stress for those trying to comply with tax regulations or settle outstanding debts. Additionally, the reduced workforce may strain the IRS’s ability to process returns and refunds efficiently, affecting millions of taxpayers.
For communities relying on timely tax processing for essential funding and services, the IRS’s challenges could disrupt financial planning and public service delivery. The potential decline in taxpayer service quality underscores the need for strategic solutions to maintain effective government operations and ensure taxpayer needs are met. As the IRS navigates these staffing changes, taxpayers may need to adjust their expectations and prepare for longer processing times and communication delays.