IRS Staff Losses Raise Concerns Over 2026 Tax Filing Season, Independent Report Warns
The Internal Revenue Service (IRS) faces significant challenges ahead of the 2026 tax filing season, as a recent independent report highlights a dramatic reduction in the agency’s workforce that could jeopardize its ability to provide timely service and process tax returns efficiently.
Staff Exodus Threatens Tax Season Success
The IRS recently concluded one of its most successful tax seasons in years, bolstered by a workforce expanded to approximately 102,000 employees following a substantial hiring push under President Joe Biden. This expanded staff helped drive tax revenue collections upward, with a 9.5 percent increase in April 2025 compared to the previous year, reaching $850 billion, and an even steeper 14.7 percent surge in May, totaling $371 billion.
However, in the three months following the April tax filing deadline, the agency has experienced a staggering loss of more than one-quarter of its workforce. Tens of thousands of employees departed, many taking advantage of early-retirement buyouts promoted by the Trump administration’s U.S. DOGE Service initiative, designed to reduce government payroll expenses. According to a report from the National Taxpayer Advocate, IRS staff levels have shrunk by 26 percent since the peak of the recent tax season.
Impact on Service and Technology Capabilities
Erin Collins, the National Taxpayer Advocate, described the 2025 filing season as “one of the most successful filing seasons in recent memory,” but cautioned that the workforce reductions, combined with anticipated tax law changes, present substantial risks for the following year.
A particularly critical concern is the loss of over 2,000 information technology employees—more than a quarter of the IRS’s IT staff. This shortage threatens the agency’s capacity to implement forthcoming tax law changes that congressional Republicans are currently pursuing, including the timely update and distribution of numerous IRS forms required for the 2026 filing season that starts in January.
Other divisions within the IRS also suffered significant cuts:
- The small business tax services office shrank by 35 percent, decreasing from over 24,000 staff members to under 16,000.
- The office responsible for the Enterprise Case Management system, an initiative aimed at modernizing IRS processes, plunged from 51 employees to only 15.
- The Transformation and Strategy Office, created during the Biden administration to lead agency upgrades, has seen its workforce plummet from 80 staff to just four workers under the Trump administration’s restructuring efforts.
- The IRS’s largest division, Taxpayer Services, which historically comprised approximately 40 percent of the agency’s workforce, lost more than 20 percent of its employees since May. Many of these workers provided direct customer support, such as answering phones and staffing in-person assistance centers.
Congressional and Expert Concerns
The workforce reductions have raised alarms among policymakers and former IRS officials alike. At a Capitol Hill hearing led by Rep. Steny Hoyer (D-Md.), former IRS Commissioner John Koskinen expressed deep concern, recalling years of “abysmal” customer service and warning that the current staffing losses could undermine the agency’s ability to execute another successful filing season.
Despite the Trump administration’s proposals to reduce the IRS budget by 20 percent and rescind $16 billion in special funding enacted under Biden, it had emphasized a commitment to maintaining high-quality customer service. Nevertheless, the Taxpayer Services division alone recorded a loss of more than 9,000 staff members, far exceeding the administration’s budgetary goal of cutting only around 100 positions in 2026. Former taxpayer advocate Nina Olson highlighted the impracticality of these staffing levels. She noted that training new hires to answer taxpayer queries requires significant lead time, which is currently hampered by a federal hiring freeze imposed during the Trump administration.
Performance Metrics and Future Outlook
Despite staffing challenges, the IRS successfully processed 98 percent of tax returns on time during the latest filing season and managed to reduce backlogged returns to 3.8 million—about half of the previous year’s total. The agency also handled over 12 million phone calls, with average wait times around eight minutes, and just two minutes on the most popular individual income tax line.
However, Collins’s report warns that the upcoming tax season could present heightened demands, especially if Congress enacts the “One Big Beautiful Bill Act,” which includes multiple retroactive provisions affecting the 2025 tax year. Should this legislation pass, the IRS will need to rapidly update tax forms and programming, potentially leading to an increased volume of taxpayer inquiries requiring additional staff.
Conclusion
The dramatic reduction in IRS workforce presents serious challenges heading into the 2026 tax filing season. Without adequate staffing—especially in critical IT and taxpayer services roles—the agency risks returning to the service gaps and delays that had plagued prior years. Observers urge policymakers to address these issues promptly to ensure the IRS can maintain efficient and effective operations in the face of evolving tax law and growing demand.
This article was produced for Smart Money Mindset based on reporting from The Washington Post.