The IRS has maintained stable tax return processing and refund issuance despite significant staff reductions through Elon Musk’s Department of Government Efficiency (DOGE), according to tax professionals.
The agency has eliminated thousands of positions in recent weeks as part of the Trump administration’s government streamlining initiative, raising concerns among Democrats about potential disruptions during tax season. Despite these workforce reductions, electronic filing systems and refund processing have continued to function effectively, though some delays have emerged in compliance and enforcement areas, tax professionals told CNN on Sunday. (RELATED: DOGE Reportedly Begins Chipping Away At IRS’s Legion Of Tax Collectors)
“It seems to be business as usual,” Mark Koziel, CEO of the American Institute of Certified Public Accountants, told the outlet, adding that tax preparers have been able to file returns and receive refunds without significant issues.
The IRS just said it wants $20B more money.
Do you think it’s budget should be:
— Elon Musk (@elonmusk) November 27, 2024
The IRS workforce has shrunk considerably, with about 6,700 probationary employees terminated in February and nearly 5,000 more accepting voluntary resignation packages. An additional 6,800 employees could face layoffs in May, sources separately told CNN.
H&R Block representatives confirmed to the outlet that tax returns are being processed efficiently, reinforcing observations from CPAs nationwide that filings are continuing as expected. Despite previously urging the agency to boost its total employment to 100,000 as part of a “modernization effort,” former IRS Commissioner Danny Werfel acknowledged the IRS is operationally stable despite the cuts — though he attributed this to previous investments in agency technology and other tools implemented during his tenure under former President Joe Biden.
“The layoffs so far have been more targeted on the collection side than the taxpayer services side,” Werfel told CNN.
His calls to increase IRS employment came after Biden had already approved the hiring of 87,000 new IRS employees over a period of ten years beginning in 2023.
WASHINGTON, DC – APRIL 2: IRS Commissioner Danny Werfel poses for a portrait at IRS headquarters in Washington, D.C. on April 2, 2024. (Amanda Andrade-Rhoades for The Washington Post via Getty Images)
Critics maintain that deeper staffing reductions could eventually impact both taxpayer services and federal revenue collection — while conservative criticism has steadily increased over recent years amid massive staff expansions and the implementation of a reporting requirement for payment platforms to report transactions exceeding $600 to the IRS, a threshold that was significantly lowered from the previous $20,000 limit in 2022.
Despite these concerns, early IRS statistics show that refunds are being issued at a slightly higher rate than last year, with the average refund amount up nearly 6% compared to the same period in 2024. The agency has processed over 43.6 million refunds as of March 7, even as the total number of returns received is slightly down from last year. (RELATED: ‘Force Of Super-Geniuses’: DOGE Is Reportedly Knocking On The IRS’ Door)
The IRS remains the most unpopular federal agency in America, with a July Pew Research poll showing 50% of Americans view it unfavorably. Republicans generally hold more negative opinions following the agency’s 2017 formal apology for subjecting conservative groups to “heightened scrutiny and inordinate delays” when processing tax-exempt applications.
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