Thousands of Internal Revenue Service (IRS) employees are facing impending job losses as part of a federal spending reduction plan initiated by the Department of Government Efficiency (DOGE). This wave of layoffs is expected to affect between 6,000 to 7,000 workers and could significantly impact millions of taxpayers aiming to file their returns before the April 15 deadline. The cuts, which began just three weeks into the tax season, have drawn criticism from Senate Finance Committee Democrats who warn of potential disruptions, describing it as a potential "tax refund train wreck."
The layoffs primarily target probationary employees with less than one year of service, though some with longer tenures may also be affected. These individuals form a significant portion of the estimated 15,000 probationary staff at the IRS, many of whom were hired through funding from the Inflation Reduction Act (IRA). The exact number of workers to be laid off remains unconfirmed by the U.S. Department of the Treasury.
Critics argue that these staff reductions may lead to increased processing times and potential delays in tax refunds. The IRS system flags returns that contain incorrect personal details or missing information, which necessitates direct contact with the agency for resolution. Amid these concerns, taxpayers are advised to submit their returns promptly.
"Get that return in as quickly as possible," advises tax expert Adam Brewer.
To mitigate potential delays, the IRS recommends electronic filing and opting for direct deposit to expedite refunds. Typically, the agency processes an e-filed return within 21 days. Additionally, taxpayers can utilize the IRS2Go app to monitor their refund status.
The layoffs are viewed as part of a broader effort by DOGE to slash federal spending across various government agencies. Republican lawmakers have targeted IRS funding since former President Joe Biden approved an $80 billion allocation for the agency through the IRA in 2022. This move aimed to bolster the IRS's capacity to manage rising workloads and improve service delivery.
Despite the anticipated challenges, some experts believe that taxpayers who file accurately may not experience noticeable differences in processing times.
"If you have a good submission, you may not notice any change," says Tom O'Saben from the National Association of Tax Professionals.