The Internal Revenue Service (IRS) commenced the 2024 tax filing season on January 27th, facing unprecedented challenges stemming from a series of Trump administration initiatives. These initiatives have created a perfect storm of constraints that threaten the agency’s ability to efficiently process an anticipated 140 million individual tax returns. Staff shortages, leadership vacancies, and potential expertise drain pose significant risks to timely processing, taxpayer assistance, and the security of sensitive taxpayer information. This confluence of factors has created a precarious situation for both the IRS and American taxpayers.
The IRS is grappling with a significant leadership void, operating under a temporary acting commissioner following the resignation of former chief Daniel Werfel. While President Trump nominated former Congressman Billy Long as a replacement, the Senate has yet to schedule a confirmation hearing. Long’s previous legislative efforts to abolish the IRS, as part of a broader plan to replace the income tax system with a national sales tax, raise concerns about his commitment to the agency’s mission. This leadership vacuum further exacerbates the agency’s existing challenges.
Compounding the leadership gap, the IRS is facing potential staffing crises due to administration-driven initiatives encouraging federal employee resignations and retirements. A buyout program offering continued pay and benefits to employees who depart by February 6th, coupled with separate initiatives simplifying the dismissal of federal workers, has created an atmosphere of uncertainty and potential exodus within the agency. The timing of these initiatives, coinciding with the peak of tax filing season, could drastically disrupt operations and negatively impact taxpayer services. Losing experienced staff during this crucial period is analogous to dismissing teachers at the start of the school year, crippling the institution’s ability to function effectively.
Even prior to these new administrative pressures, the IRS had warned of insufficient funding to maintain recent improvements in taxpayer services. Projections indicated a decline in phone call response rates from 85% in the current year to a mere 30% by 2026. The potential for mass resignations, coupled with a hiring freeze imposed by the Trump administration on all federal agencies except for a targeted and indefinite freeze on the IRS, will likely accelerate this decline, impacting service quality during the current tax season. This deliberate targeting of the IRS further undermines its ability to fulfill its mandate.
Adding to the complexity, President Trump has threatened to dismiss or reassign IRS staff hired under the 2022 Inflation Reduction Act, falsely characterizing them as enforcement agents targeting ordinary taxpayers. In reality, a majority of these new hires were dedicated to improving taxpayer services, particularly answering taxpayer phone calls. These misleading claims and threats contribute to a climate of instability and demoralization within the agency, hindering its ability to recruit and retain essential personnel.
The confluence of these factors places the IRS in a vulnerable position. Many experienced staff members, including those nearing retirement and recent hires, may find the buyout offers attractive, especially considering the uncertain future of the agency. The potential loss of specialized personnel, particularly in IT and cybersecurity, is particularly concerning. These experts are crucial for maintaining the integrity and functionality of the agency’s complex computer systems, which are vital for processing returns and safeguarding sensitive taxpayer data. Their departure would create a significant security risk and hinder the IRS’s ability to operate effectively.
Beyond the internal challenges, the future of federal grant funding for vital taxpayer assistance programs remains uncertain. Programs like the Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE), which provide free tax preparation services to low-income individuals, the disabled, and limited English speakers, are at risk. These programs served 2.7 million filers in 2024 and received $53 million in funding for the current filing season. Their potential disruption would disproportionately impact vulnerable populations who rely on these services for navigating the complexities of tax filing and claiming crucial benefits such as the Child Tax Credit. Similarly, the IRS Direct File program, which allows low-income taxpayers to file simple returns electronically free of charge, also relies on skilled IRS staff for smooth operation. The uncertainty surrounding these programs further jeopardizes the ability of low-income taxpayers to access essential tax assistance.
