In 2025, the Internal Revenue Service (IRS) encountered one of its most chaotic periods to date due to major workforce cuts, leadership uncertainties, and increasing worries over the quality of taxpayer services. From large employee buyouts to significant turnover among leadership, these disruptions could jeopardize the agency’s capacity to handle returns effectively and maintain public confidence.
Main Factors of Instability
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Large-scale Job Cuts and Postponed Resignation Initiatives
By 2025, more than 25% of IRS personnel, approximately 25,700 employees will have departed owing to buyouts, resignations, or dismissals. In March, over 11,000 staff were either let go or accepted offers of deferred resignation. A number of these impacted probationary workers were subsequently reinstated after legal orders.
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Leadership Turnover
The IRS has faced remarkable turnover in leadership: by August 2025, the agency has had seven commissioners or acting commissioners in only a year. This volatility has triggered worries about strategic consistency and the safeguarding of taxpayer information.
3. Employment Freezes and Hiring Obstacles
A hiring freeze at the federal level established by President Trump on January 20, 2025, is still in place for the IRS and can only be lifted by the Secretary of the Treasury. This freeze, along with hiring and onboarding delays from prior years, worsens the agency’s staffing deficiency.
4. Reducing Staff Throughout Departments
From January to June 2025, the IRS staff decreased from roughly 102,000 to under 76,000, a decline of about 26%. The IT workforce decreased by 27%, and almost 9,000 customer service staff members left. Some departments experienced severe reductions; for instance, the Transformation and Strategy Office was reduced by 95%, while the staff of the Chief Tax Compliance Officer was cut by 90%.
Repercussions for Taxpayers and the IRS
- Processing Delays & Refunds: The departure of skilled employees has jeopardized the promptness of refunds and heightened processing delays. The National Taxpayer Advocate highlighted these issues while urging for early recruitment for the 2026 filing period.
- Deteriorating Customer Service Standards: Taxpayers are experiencing significantly increased wait times on IRS phone lines, with specialists cautioning that the issue will escalate in the 2026 filing season.
- Diminished Audit & Taxpayer Assistance Ability: The decline in revenue agents (more than 30% reduction) and contact representatives (10% reduction) jeopardizes audit enforcement and support functions, particularly with the increasing complexity of tariff- and trade-related taxes.
- Challenges to Modernization: Crucial divisions accountable for innovation, such as the ll—alongside the deterioration of outdated systems and a lack of IT personnel present enduring threats to the IRS’s technological strength.
Mitigation and Recovery Efforts
- The IRS is stopping intended layoffs and is proactively providing the chance to withdraw deferred resignations for 400 revenue agents and 300 revenue officers to fill crucial vacancies.
- Strategies for internal reassignment and new recruitment initiatives are being enacted to ensure stable staffing levels.
- Although the 2025 filing season was largely efficient, with 138 million returns completed, the diminished workforce presents considerable threats for 2026 if prompt corrective measures aren’t implemented.
Why This Matters for Taxpayers
As agencies like the IRS struggle with staffing challenges, delays trickle down to taxpayers impacting refunds, customer support, and the IRS’s capacity to provide guidance.
For those navigating IRS difficulties whether due to refund delays, notices, or changing deadlines, Priority Tax Relief offers a wealth of expertise. Explore how we help with:
- Letters & Notices: Understanding Your IRS Tax Topic 151 and Your Refund
- Payment Plans and Alternatives: Denied IRS Payment Plan? Explore Your Options
- Extended Filing Deadlines: IRS Tax Deadlines Extended for Disaster‑Affected Areas
These resources can empower you to better manage IRS-related challenges when staffing issues cause delays or confusion.
Frequently Asked Questions: IRS Staffing Challenges & Workforce Instability
Why has the IRS lost such a large share of its workforce in 2025?
Driven by cost-cutting directives from the Department of Government Efficiency, the IRS implemented widespread buyouts, layoffs, and forced resignations, reducing staff by more than 25%.
What is the "Deferred Resignation Program" and how is it being reversed?
The Deferred Resignation Program (DRP) allowed employees to resign at a future date while remaining on payroll. Recently, the IRS has invited some to rescind their resignations, specifically 400 revenue agents and 300 revenue officers to fill urgent roles.
How has leadership turnover impacted the IRS?
Rapid changes in leadership with seven commissioners or acting commissioners in one year have hampered strategic consistency, planning, and morale.
What are the main areas hardest hit by staffing cuts?
Major reductions occurred in IT (27%), customer service (over 9,000 staff lost), and key offices like Transformation and Strategy (–95%) and Tax Compliance (–90%).
How have these cuts affected taxpayers?
Taxpayers are reporting longer refund waits, more difficulty reaching support via phone, and delays in IRS guidance—all signs of erosion in service capacity.
Did filing season 2025 go smoothly?
Yes, the IRS managed to process around 138 million returns in 2025. However, challenges like refund delays for identity theft victims and suspended returns underscore the risks ahead.
