It’s the time of year that everyone enjoys least: tax filing season. But, adding to this year’s anxieties are Donald Trump’s executive orders targeting various federal agencies, and the potential effect on taxpayer returns.
A combination of resignations, cuts to taxpayer assistance programs, and current lack of senior leadership – the agencies former chief resigned on inauguration day – and staffing could slow down the Internal Revenue Service processes and leave people waiting for financial rebates.
Since taking office on January 20, the president has signed a flurry of executive orders, including ones intended to downsize current branches of government and an administration initiative encouraging federal employees to resign or retire.
The initiative, which began on January 28, is available to all federal employees until February 6. Tax filing season in the U.S. began on January 27 and a reduction in the IRS workforce of any size is likely to slow down the returns process, given it is the busiest time of the agency’s year.
In addition, the IRS estimates that with current and projected level of funding, by 2026 less than one in three taxpayers will get through to the service if they call.
“Currently it is estimated that the 85% level of service target for the 2025 filing season will necessarily drop to less than 30% in FY 2026 once IRA resources are exhausted (absent additional future funding),” the agency states.
The IRS workforce is unlikely to expand any time soon. Trump has ordered that the tax collector be subject to an indefinite hiring freeze until his administration determines it is “in the national interest” to resume hiring. At other federal agencies the freeze is only for 90 days.
To make matters worse, Trump’s targeting of federal grants puts at risk the IRS’ Volunteer Income Tax Assistance and Tax Counseling for the Elderly schemes.
The programs offer free support and tax preparation for filers including those who make $67,000 or less, are living with disabilities, or who are limited English-speakers. According to Forbes, in 2024 these two programs helped 2.7 million taxpayers.
Such schemes are important for low-income families who rely on receiving their rebates early as well as assistance to help them with processes including claiming benefits such as the Child Tax Credit.
As well as cuts to grants and workforce, the IRS is currently awaiting the appointment of a full-time commissioner, after the early resignation of Daniel Werfel, who resigned on inauguration day – to years early.
Trump’s nominee for the role is former Republican congressman Billy Long, but the Senate has not yet scheduled a confirmation hearing for him. As a congressman, Long previously introduced legislation to abolish the IRS.
