Summary
An independent watchdog report highlights that the IRS lost about a quarter of its employees due to staffing cuts linked to budget changes championed by President Trump. This reduction could impact the 2026 tax filing season as the IRS deals with fewer workers and upcoming tax law changes. The report also notes ongoing challenges like delays in resolving identity theft cases.
Key Facts
- The IRS workforce dropped from 102,113 to 75,702 employees over the past year.
- Over 17,500 workers left the IRS through a program offering resignations instead of potential layoffs.
- The biggest staff cuts affected taxpayer services, small business/self-employed offices, and IT.
- Next year's federal budget proposes a further 20% funding reduction for the IRS.
- Erin M. Collins, a taxpayer advocate, warns that the reduced IRS staff and changes in tax laws might make the 2026 tax season difficult.
- New legislative changes may increase workload for the IRS due to retroactive tax law applications.
- The IRS faces delays of up to 20 months in resolving identity theft cases, despite improvements noted in the report.
