Warnings Issued On IRS Tax Refund Delays – Newsweek

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Aliss Higham is a Newsweek reporter based in Glasgow, Scotland. Her focus is reporting on Social Security, other government benefits and personal finance. She has previously extensively covered U.S. and European politics, Russia’s invasion of Ukraine and the British Royal Family. Aliss joined Newsweek full time in January 2024 after a year of freelance reporting and has previously worked at digital Reach titles The Express and The Mirror. She is a graduate in English and Creative Writing from Goldsmiths, University of London. You can get in touch with Aliss by emailing a.higham@newsweek.com. Languages: English.

Aliss Higham

US News Reporter

Employee layoffs at the Internal Revenue Service (IRS) could impact the timely return of tax refunds and other services, experts have said.

Newsweek has contacted the IRS for comment via email outside of regular working hours.

Why It Matters

President Donald Trump‘s administration is pushing ahead with significant staff cuts, which have already affected thousands of workers.

The Associated Press reported this week that half of the federal agency’s workforce could be let go. The IRS currently has some 90,000 workers, and cuts to the agency would include a mixture of incentivized buyouts, attrition and layoffs. Some 7,000 probationary IRS employees were let go on February.

What To Know

“While the IRS has made progress in modernization, reduced staffing could slow the processing of returns, leading to potential refund delays for some taxpayers,” Clay Hodges, director of national tax at professional services firm Moss Adams, told Newsweek. “I anticipate these delays could create a cascading effect— as more returns pile up, it will become increasingly difficult for the IRS to keep pace, further straining its ability to process refunds in a timely manner.”

Adam Brewer from AB Tax Law has also voiced concern, particularly for those who do not use electronic filing.

“If you send in a paper return, at a minimum, someone at the IRS has to be there to open the envelope, and we saw in the pandemic that doesn’t get done when they get far behind,” Brewer explained to The Hill. “We’ve had situations where people send in payments, they never get cashed, and suddenly there’s additional penalties and interest.”

John Koskinen, a former IRS commissioner, told AP that reduction in force of tens of thousands of employees would render the IRS “dysfunctional.”

Koskinen and six other former IRS Commissioners wrote in the New York Times earlier in March: “Aggressive reductions in the IRS’s resources will only render our government less effective and less efficient in collecting the taxes Congress has imposed.”

Hodges agrees, saying that customer services at in-person tax offices and phone appointments are likely to be impacted.

“The recent IRS terminations and field office closures could strain on the agency’s ability to maintain normal operations, especially during peak tax season,” he said, pointing to the Taxpayer Advocate Service being among the worst impacted as it faces “staffing shortages and a surge in taxpayer requests.”

Under the Biden administration, the IRS managed to cut phone wait times from 28 minutes down to 3 minutes, and assisted over 100,000 more taxpayers in person during the 2023 filing season.

But with fewer personnel, “taxpayers will likely face longer wait times when seeking assistance,” Hodges continued. “In my experience, customer service is one of the first areas to decline when the IRS faces staffing shortages, making it more difficult for taxpayers to get the help they need in a timely manner.”

What’s Next

Direct confirmation of the cuts reported by The Associated Press has yet to come from the IRS, and a timeline for how long it would take the changes to be initiated is not known.