Millions of Americans awaiting their IRS tax refunds this season may face significant delays due to mass layoffs at the Internal Revenue Service (IRS), part of a broader federal workforce reduction under the Trump administration.
The IRS, already grappling with staffing shortages, has announced plans to cut nearly 20% of its workforce by May 15—a move that tax experts warn could cripple refund processing times just weeks after the April 15 tax filing deadline.
The layoffs, affecting nearly 18,000 IRS employees, have sparked concerns over the agency’s ability to maintain basic operations, including issuing tax refunds in a timely manner.
IRS Workforce in Crisis
The Department of Government Efficiency (DOGE), a newly formed agency led by billionaire Elon Musk, has spearheaded these cuts as part of a sweeping cost-reduction effort across federal agencies. Since DOGE’s formation in January, thousands of government workers have been fired or accepted buyout offers, with the IRS among the hardest-hit agencies.
The IRS layoffs include nearly 6,800 terminations of full-time employees, in addition to 6,700 probationary workers let go earlier this year and approximately 4,700 buyouts accepted by employees fearing job security.
“These cuts are happening at the worst possible time for taxpayers who depend on their tax refunds for financial relief,” said Richard Pon, a public accountant. “Fewer staff means slower processing times, longer call wait times, and a backlog of unresolved cases.”
Tax Refund Delays Loom
For millions of Americans, tax refunds represent a crucial financial boost. In 2023, the IRS issued over $360 billion in refunds, with the average tax refund exceeding $2,900, according to agency data.
Now, taxpayers could face weeks-long delays in receiving refunds due to IRS understaffing. Processing centers that typically handle millions of paper returns may struggle to meet demand, while customer service agents—already stretched thin—are expected to experience a surge in inquiries.
“If you need your tax refund quickly, file early and file electronically,” said Clay Hodges, director of national tax at professional services firm Moss Adams. “Processing delays will likely get worse as we move closer to the filing deadline.”
Mounting Political Fallout
The IRS layoffs have sparked a political firestorm. Federal employees’ unions, congressional Democrats, and taxpayer advocacy groups have raised alarms over the sudden downsizing of the nation’s tax collection agency.
In a letter sent to IRS Acting Commissioner Melanie Krause, a coalition of House Democrats warned that the cuts could “undermine the IRS’ ability to provide timely refunds and taxpayer support.”
“These mass layoffs will disproportionately harm working families who rely on their tax refunds to pay bills, make rent, or cover medical expenses,” the lawmakers wrote. “The American people deserve an IRS that can function properly.”
Legal Battles and Uncertain Future
The IRS layoffs are now facing legal challenges. On Thursday, a federal judge temporarily blocked the Trump administration from proceeding with further workforce reductions, ordering the rehiring of thousands of federal employees across multiple agencies, including the IRS.
However, the White House has signaled plans to appeal, leaving the fate of thousands of IRS workers—and the tax refunds they help process—uncertain.
For now, experts urge taxpayers to submit their returns as early as possible and opt for direct deposit, which remains the fastest way to receive a refund. Delays could stretch beyond the typical 21-day processing window, especially for taxpayers who file late or claim complex deductions.
“Americans depend on their tax refunds, and this disruption will have real financial consequences,” said Pon. “Unfortunately, taxpayers should expect delays—and frustration.”
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