The Internal Revenue Service (IRS) is facing a serious staffing crisis that could significantly delay tax refunds and hinder customer service during the 2026 filing season. A recent report by National Taxpayer Advocate Erin Collins warns that sweeping job cuts under the Trump administration’s 2025 cost-cutting campaign may leave the agency ill-equipped to handle upcoming challenges.
According to the June 25 report, the IRS has lost over 26% of its 102,000-person workforce due to layoffs and voluntary buyouts, bringing its total staff down to just over 75,000 employees. The cuts were part of a broader initiative by the Trump administration to reduce the size of the federal government, led in part by Elon Musk’s Department of Government Efficiency.
Despite these reductions, the IRS managed to complete the 2025 tax season successfully, processing 138 million returns and issuing 86 million refunds with an average refund amount of $2,942. “It was one of the most successful filing seasons in recent memory,” Collins said. However, she emphasized that “significant tax law changes on the horizon” pose a real threat to the upcoming season. Without urgent preparations, including a major hiring push, taxpayers could face delays in processing and refunds.
One of the biggest challenges ahead is implementing the changes from a sweeping new tax bill passed by the Senate on July 1. The legislation includes dozens of new tax cuts, extensions, and adjustments. Reprogramming IRS systems to accommodate these changes will fall to the already-strained Information Technology unit, which has lost 27% of its staff. Meanwhile, the Taxpayer Services unit, responsible for answering taxpayer questions and processing inquiries, has lost more than 9,000 employees—22% of its workforce.
“There’s a real risk of chaos next season,” Collins warned, urging the IRS to begin hiring and training thousands of new employees immediately.
Other experts echoed her concerns. “You can’t make those kinds of deep cuts without harming customer service,” said David Kass, executive director of Americans for Tax Fairness. “This is a mistake of the administration’s own making.”
In her 75-page objectives report to Congress, Collins also emphasized the need to modernize IRS systems. She highlighted the agency’s fragmented infrastructure, noting that taxpayer data is spread across 60 separate case management systems that don’t effectively communicate. As a result, representatives often struggle to access information during service calls, increasing wait times and frustration.
The report also pointed out the low adoption rate of IRS online accounts. Currently, only about 10% of taxpayers use them, as most essential functions—like filing returns or responding to notices—are still unavailable through the platform.
One notable casualty of the staffing cuts may be the IRS Direct File program. Launched as a no-cost filing option for taxpayers with simple returns, the program had expanded to 25 states in 2025. But with the Trump tax bill calling for a task force to consider its replacement, and staff numbers dropping from 27 to just 5 in the first half of 2025, its future is uncertain.
Alex Muresianu, a senior analyst at the Tax Foundation, summed up the broader concern: “Maybe the cuts to staffing alone wouldn’t have had a huge impact if all else held equal. But having big staffing cuts the same year as major tax changes is a dangerous mix.”
With the 2026 tax season approaching and new legislation taking effect, pressure is mounting on the IRS to rebuild its workforce and modernize its systems to prevent delays and ensure a smooth experience for taxpayers.