IRS Workforce SLASHED: Refund Chaos Looms

Wooden blocks spelling IRS surrounded by rolled currency notes — IRS WORKFORCE SLASHED

The IRS workforce, slashed to 74,000, triggers dire warnings of refund delays and service breakdowns just as President Trump’s tax cuts demand flawless execution.

Story Snapshot

IRS employees dropped by 27%, from 102,000 to 74,000, amid DOGE-led efficiency cuts, hitting taxpayer services hardest.
New H.R. 1 tax law requires urgent retroactive changes, straining an understaffed agency during the 164 million return peak.
2025 succeeded with full staffing; 2026 risks backlogs, poor phone support at 85% level, and delayed refunds.
Seasonal hiring hit only 66% of the target; leadership vacancies cripple coordination.

Workforce Plummets Under DOGE Reforms

IRS workforce shrank from over 102,000 in January 2025 to 74,000 by December 2025, a 27% reduction driven by Department of Government Efficiency buyouts and resignations.

DOGE, led by Elon Musk, targeted probationary and non-civil service staff in taxpayer services, IT, and enforcement, shedding over 17,500 positions.

This rollback rescinded most Inflation Reduction Act funds, slashing the FY2026 budget by 37% to $14.2 billion. Taxpayer services rose on paper to 34,044, but actual exits undermined gains. Conservatives applaud shrinking bloated bureaucracy, yet watchdogs flag risks to basic operations.

The national taxpayer advocate is cautioning that the 2026 tax filing season is likely to present challenges for taxpayers who encounter problems with filing their taxes given the exodus of IRS workers since the start of the Trump administration. https://t.co/chWHlnlvfu

— World News Tonight (@ABCWorldNews) January 28, 2026

New Tax Law Compounds Staffing Crisis

President Trump signed H.R. 1, the One Big Beautiful Bill Act, in the summer of 2025, which mandated complex, retroactive tax changes. IRS must update forms, instructions, and programming amid unprecedented staffing lows echoing 2021 levels. Unlike 2025’s smooth season with peak staffing and no major laws, 2026 opened January 26, expecting 164 million returns by April 15.

Government shutdowns delayed seasonal hiring; Accounts Management approved 3,500 hires in August but onboarded only 2,300 by December, limited to basic call screening. This strains the implementation of pro-growth reforms families need.

Watchdogs Sound Alarm on Backlogs and Service

Treasury Inspector General for Tax Administration issued a January 28 memo to Treasury Secretary Scott Bessent, warning of growing backlogs in amended returns and correspondence.

National Taxpayer Advocate Erin M. Collins released her annual report to Congress, noting 28 of 28 top IRS leadership positions vacant or acting as of November 2025.

New hires rely on overtime with incomplete training, projecting phone service at 85% versus 2025’s 87%. Collins highlighted 2025 success but predicted a “markedly different” rocky 2026 without urgent fixes. Taxpayers deserve reliable service after years of waste.

Enforcement staff drops 31% to 22,303, and tech support 59% to 4,250, aligning with conservative priorities to curb IRS overreach on everyday Americans. Yet lost institutional knowledge threatens long-term modernization and revenue collection.

Impacts Hit American Families Hardest

Short-term fallout includes refund delays, which force IRS interest payments, and slower family spending. Low-income households dependent on quick refunds suffer most, while businesses face processing lags. Tax preparers brace for strained operations, complicating retirement plans like SECURE 2.0 extensions.

Long-term, experienced exits erode expertise, but efficiency gains promise leaner government delivering Trump’s tax relief without Biden-era bloat. Political debate pits DOGE savings against service dips; Treasury projections remain slightly optimistic versus actuals.

Oversight from NTA and TIGTA lacks enforcement power because the administration controls budgets. Bessent’s dual Treasury-IRS role highlights resolve to streamline, prioritizing American wallets over endless expansion.