The IRS can’t beef up its workforce
The next blows came to the IRS’s labor force. On Jan. 20, President Donald Trump — looking to slash funding of government agencies — ordered a hiring freeze on federal civilian employees.
This freeze will last indefinitely for the IRS until the U.S. Treasury Secretary determines that "it is in the national interest to lift the freeze." Then, Trump offered buyouts to all federal employees who left their jobs by Feb. 6. Although IRS employees involved in this year’s tax filing season must wait until May 15, issues that extend beyond this may be handled by a reduced staff.
In light of these changes and ahead of his likely firing by Trump, the head of the IRS, Commissioner Danny Werfel, resigned, leaving the agency without leadership until Trump’s pick is confirmed. Most recently, the Trump administration is looking at deputizing IRS agents to help with immigration enforcement.
It is unlikely the IRS will be able to secure more resources under the new administration. Trump has suggested eliminating federal income taxes altogether. Reuters reports that on Feb. 13, a senior member of the Elon Musk-led Department of Government Efficiency (DOGE) visited the IRS and started looking for places to make cuts.
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Learn MoreSome of the burden will fall on taxpayers
These changes create new risks for taxpayers. Some of these could be seen as soon as this filing season, but have the potential to severely impact future seasons.
"My office is hearing that DOGE is now at the IRS. That means Musk's henchmen are in a position to dig through a trove of data about every taxpayer in America. And if your refund is delayed, they could very well be the reason," said Oregon Senator Ron Wyden on X. Musk responded with laughing emojis.
It seems like the IRS will be working with less funding and fewer people than it needs.
It expects to receive more than 140 million tax returns ahead of the deadline this season. In fiscal year 2024, only 31% of callers to the IRS reached an assistant; Deputy Secretary Adeyemo has said that with funding cuts, call wait times will surge.
Not being able to get proper answers to your tax questions increases your risk of filing an incorrect return, which can lead to substantial monetary penalties. Once you’ve filed your return, it’s possible that funding and staffing reductions will also add to the existing problem of processing delays — and a reduction in resources is not likely to help fix the issue.
Cuts could even result in a higher chance of being audited. Deputy Secretary Adeyemo pointed out that less funds for technology means less ability to develop artificial intelligence and machine learning that are used for big-ticket enforcement actions.
If fewer of these are undertaken, it may mean that audits on middle-class taxpayers will increase because they're easier to do without advanced technology. If you want to appeal an IRS decision, this is also likely to take longer.
Currently, it takes almost two years on average to resolve identity theft cases, which affect nearly half a million taxpayers. One of the recommendations made by National Taxpayer Advocate Erin M. Collins in her 2024 Annual Report to Congress was to refrain from reassigning Identity Theft Victim Assistance (IDTVA) unit staff to other roles during the filing season.
This will be made more difficult in the face of agency-wide understaffing, so if your identity is stolen, you could face much longer delays in getting help from the IRS.
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