The Internal Revenue Service (IRS) has fired 7,000 workers in Washington, D.C., and around the country—layoffs occurring right as the 2025 tax return filing season hits full steam.
The cuts are one step in the charge of the newly created Department of Government Efficiency’s goal of to reduce the deficit by $1 trillion—which has begun with mass layoffs at multiple government agencies, leaving federal employees baffled and setting the stage for future legal battles.
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In a statement obtained by the Washington Post, former IRS Commissioner Charles Rettig, who worked under President Donald Trump’s first term, stated that “there should not be a significant impact on current filing season operations.”
Some experts are expecting potential disruptions, though.
“If you fire thousands of IRS employees broadly during the tax season, it’s hard to do that in a way that doesn’t pose risks to the filing season,” said Michael Kaercher, Deputy Director of the Tax Law Center at NYU Law. “They’ve said that they are not firing people who are critical to the tax filing season, but until we know exactly who those folks who have been let go are, I don’t know that we can verify that with any level of certainty.”
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Kaercher says that risks to the filing season could include delayed tax refunds, inability to answer as many phone calls or help lines, and “there’s a question of whether they retained the right people in house” to quickly solve technical issues should they arise during tax season.
Kaercher also notes there were reports of the IRS removing several pages sections of their Internal Revenue Manual, which outlines its policies and procedures, which could prevent taxpayers from fully complying with their fine obligations.
Kaercher notes that these changes will not simply affect this tax season, but could have long-term effects on the work of the tax agency.
“The layoffs will undermine revenue collection and increase the budget deficit. Most of the IRS employees laid off worked in tax compliance, which raises revenue by preventing tax fraud.” Kaercher wrote on X. “These cuts will encourage wealthy people and large corporations to cheat on their taxes. After a decade of sharp budget cuts, audit rates for high-income people and large corporations plummeted.”
Ed Oswald, partner at Orrick Law Firm in Washington D.C. and former attorney-advisor for the U.S. Treasury Department says there are a few ways that taxpayers can prepare themselves for both the short and long-term consequences of the IRS cuts, especially as he expects “less regulation, less clarity and less guidance.”
“Keep in close tax contact with your CPAs or accountants who are working with you in terms of a tax return,” Oswald said. “Try to document matters the best you can…even though the IRS is really dropping the ball here, you want to show as a taxpayer, you’re being as responsive as possible and trying to solicit and close the matter.”