KEY TAKEAWAYS
- The majority of Americans find tax preparation stressful, and 7 in 10 want tax codes to be simplified.
- Under President Donald Trump and the U.S. Department of Government Efficiency, the federal government has laid off thousands of workers and cut the IRS budget.
- Many taxpayers are worried about how this will affect the functions of the tax agency.
Many Americans want the tax filing process to be simpler and worry about what the cuts will do to the IRS.
A recent survey from marketing research firm Savanta found 70% of respondents want the IRS to simplify tax codes. Almost half said they don’t fully understand how to fill out tax forms. In addition, 64% find tax preparation stressful, 36% aren’t confident they’re maximizing deductions and credits and 36% said their biggest fear when filing is making a mistake.
While changes have occurred at the federal government’s tax agency this year, none have made filing easier. President Donald Trump and the U.S. Department of Government Efficiency, steered by Tesla CEO Elon Musk, have laid off thousands of federal workers to reduce government spending. Nearly 7% of the IRS workforce was laid off as a part of those cuts.
In addition, Congress recently passed a stopgap bill to keep the government funded through September, cutting IRS funding by $20.2 billion over the next decade. This bill eliminates funding provided to the agency through the Inflation Reduction Act of 2022. It will likely reduce the agency’s enforcement actions and result in smaller revenue collections, according to the Congressional Budget Office.
This has made many taxpayers wary of how the IRS will function through budget cuts—38% of Americans believe their refund will take longer to receive, and 32% worry cuts will lead to more tax evasion or fraud.
“Public confidence in the IRS’s ability to process tax returns is wavering as a result of the DOGE staff reductions,” said Kyle Gollins, head of commercial in the Americas at Savanta. “At the same time, many believe too little is spent on essential public services—highlighting a growing disconnect between taxpayers and how their money is managed.”
Direct File Could Be At Risk
According to Reuters, the department that helped build the IRS’s free tax-filing service was also eliminated as part of the federal job cuts. The service began as a pilot program last year and is now available in 25 states.
While the site is still available online, the program may be on the chopping block. At the end of 2024, many Republican lawmakers asked Trump to eliminate the program because they said it was a conflict of interest, an overstep in authority, and cost too much to function.
Yet, the majority of Americans would likely want the program to be expanded. According to the Savanta survey, 67% support expanding free filing options for all, and 61% believe the IRS should offer automatic tax filing for those with simple returns.