IRS staff cuts: What do they mean for taxpayers in California?
If your tax return is “squeaky clean,” you probably don’t need to worry that a tax refund will be unusually delayed.
But the IRS is bracing for big cuts, and if you need help now or in the future, that could mean a lot of frustration. The Trump administration is reportedly planning to lay off thousands of agency employees next month.
At the moment, “We have not experienced any visible impact for our firm,” said Miklos Ringbauer, founder and principal of MiklosCPA Inc., a Southern California accounting firm..
In Washington, Howard Gleckman, senior fellow at the nonpartisan Tax Policy Center, saw the same result, but with an asterisk.
“Processing this year should not be affected too badly, though staff morale is terrible and that could have some impact,” he said.
But, warned Nina Olson, executive director of the Center for Taxpayer Rights, an independent advocacy group, the layoffs and budget cuts will matter a lot for people who need help.
What she called “squeaky clean” returns, those with no issues, will probably be fine, but if staff help is needed, problems are likely.
“Anyone who says this won’t affect refunds isn’t looking at the full picture of what happens in the filing season,” she said.
“There just won’t be the people in the IRS to answer the calls or process the correspondence or review the correspondence or make the adjustments required to let those held up returns and refunds be processed,” said Olson, the former National Taxpayer Advocate, an IRS position aimed at aiding people who need help with the agency..
IRS did not respond to requests for comment about its current plans or service.
Trump’s IRS cuts
The Trump administration is cutting thousands of jobs at the IRS. Two years ago, the Democratic-run Congress approved creating 87,000 positions over 10 years aimed at improving service, technology and compliance.
Republicans protested, saying that the increases would mean more agents bothering law-abiding taxpayers with questions and accusations, even though most of the employees were not to be agents. In January, President Donald Trump froze federal hiring.
“President Trump’s cease-and-desist order to the IRS is a crucial first step to helping middle-class Americans and small businesses living in fear of 87,000 new IRS agents targeting them with new audits and monitoring their personal transactions,” said Rep. Jason Smith, R-Mo., chairman of the tax-writing House Ways and Means Committee.
Ringbauer was not sure about what was to come.
“With respect to the proposed layoffs, we presently do not know what departments will be impacted,” he said.
Will refunds be delayed?
The IRS prides itself on getting taxpayers their money quickly once tax forms have been filed and checked.
Senate Democrats wrote last month to IRS and Treasury officials warning of a “tax refund train wreck” if current policies continue.
As of March 21, the IRS had sent 55.7 million refunds totaling $179.4 billion this tax season, up from the same period a year ago. It had processed 78.7 million returns, down slightly from last year.
“If your refund claim raises issues, say the IRS questionable refund filters indicate the child you claimed on your return may not meet all the legal requirements, or your return is delayed because an identity thief filed under your name, or you left a schedule off your return … all those things require human intervention,” said Olson.
“The layoffs really impact getting your issues resolved,” she said.
Will the IRS catch errors?
Some experts have floated the idea that because of staff cutbacks, taxpayers who report income incorrectly, or not at all, won’t be caught as quickly, if at all.
A concern, said Gleckman, is “whether all the talk about IRS staff cuts will change taxpayer behavior. Will more people try to cheat, thinking they will be more likely to get away with it?
“We won’t know about that until well after the end of filing season,” he said.
Can taxpayers get answers?
The IRS’ phone system has been mired in controversy for years. The National Taxpayer Advocate’s office found that in fiscal 2022, the 12-month period that ended Sept. 30, 2022, IRS employees answered 13% of taxpayer calls.
In 2023, the office found that service had “improved substantially.” The IRS had added thousands of customer service representatives.
While the exact target of any Trump administration cuts has not been identified, there’s fear that many will come from this group.
“The first places we may be able to notice the effects of IRS cuts are in taxpayer service and just return processing. For taxpayer service, that means longer wait times on phone calls, a lower share of calls getting answered, etc.,” said Alex Muresianu, senior policy analyst at the nonpartisan Tax Foundation.
“There just won’t be the people in the IRS to answer the calls or process the correspondence or review the correspondence or make the adjustments required to let those held-up returns and refunds be processed,” Olson predicted.
Will it be tough to get service?
“The first places we may be able to notice the effects of IRS cuts are in taxpayer service and just return processing,” said Olson.
Making government more efficient is a worthy goal, Ringbauer said, adding that personal service remains a crucial need.
“Tax practitioners and taxpayers may still have issues that require paper-based correspondence or tax resolution, which require a live person to review and make a determination. These activities are facts and circumstance based and beyond the ability of automation to resolve at this time,” he said
This story was originally published April 1, 2025 at 11:37 AM with the headline "IRS staff cuts: What do they mean for taxpayers in California?."
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