The Trump administration’s changes to the federal government could alter the tax filing process for this year’s reporting period and beyond.
Republicans have been vehemently opposed to the IRS, with several legislative attempts to redirect agency funding to other efforts. DOGE targeting the IRS likely comes at little surprise given the party’s past efforts to defund the tax watchdog.
Experts say changes to the agency, if enacted, will slow this year’s tax filing process and prevent taxpayers from receiving their refunds on time.
Here’s what to know about the incoming changes.
When is tax season/when are taxes due
2025 tax season has already begun. Taxpayers could begin filing their taxes on Jan. 27.
The deadline for taxpayers to submit their return is a bit over a month away on April 15. A taxpayer can request a six-month extension by filing a Form 4868.
The agency expects more than 140 million individual tax returns to be filed before the deadline.
Updates on IRS firings/hiring freeze
After the IRS fired approximately 7,000 probationary workers, it has yet to make another major staffing move. It remains to be seen whether they will cut the IRS workforce, around 90,000 people, by as much as half with a mix of layoffs, attrition, and incentivized buyouts.
The IRS is currently under a hiring freeze and has rescinded job offers. The Treasury Department told the New York Times that the agency hasn’t approved a plan but it has a goal to modernize.
“While no plan has been approved to date, modernization is necessary to keep up with the process by which Americans file their taxes, including the reality that over 90 percent of individual tax returns are filed electronically,” the spokesperson said. “These changes are aimed at improving taxpayer customer service and ensuring a smooth and successful filing season.”
The White House sent out a memo in late February asking agencies to develop a reduction in force plan by March 13, which is on Thursday.
What experts say that means for filing taxes
President Pete Sepp of the right-leaning National Taxpayers Union, spoke with the Washington Examiner to discuss the ramifications of changes to the IRS.
Sepp believes the effect of the layoffs could be “dramatic” and that they “won’t serve the Trump administration or Republicans if handled carelessly.”
He agrees that massive layoffs would delay the tax return process across the board and could potentially lead to the government owing consumers interest on tax return refunds that are overdue. Such delays will particularly affect amended returns, which already take months to process.
Sepp has specific concerns surrounding layoffs targeting the phone hotline that tax practitioners use. “If there were layoffs there, you could see delays in a lot of small business returns that tend to be a little more complex than a typical individual return,” he said, adding that such a delay could be a “matter of survival” for some small businesses.
In addition to small businesses, those who filed earned income credit claims are expected to be affected. The tax credit is often critical to whom it helps: low- to moderate-income workers and families.
The left-leaning Tax Policy Center believes Trump’s IRS cuts could affect IRS programs such as Volunteer Income Tax Assistance and Tax Counseling for the Elderly, which assist taxpayers with filing.
“They are especially important for low-income families who rely on early refunds as well as assistance to help them with the complexities of claiming benefits such as the Child Tax Credit,” they said.
TRACKING WHAT DOGE IS DOING ACROSS THE FEDERAL GOVERNMENT
What you can do to stay ahead of the delays
It’s not clear if taxpayers who haven’t filed yet are set to be delayed. But if the IRS carries out its mass staffing cut plans, it’s likely that returns will be stalled.
Sepp said it’s “probably a good idea to file sooner rather than later” but insists that it is still better to file an accurate return than risk making an error.
“That would be a worse outcome, and I feel for people,” he said.
