What's happened
Recent tax law changes will increase refunds for many taxpayers, but a smaller IRS workforce risks delays and errors. Staffing cuts, pandemic backlog, and new digital reporting rules complicate the upcoming tax season, potentially impacting service quality and processing times.
What's behind the headline?
The combination of new tax provisions and reduced IRS staffing creates a significant risk for taxpayers this year. The IRS's workforce decline, especially among experienced employees, will likely slow processing and increase errors, particularly as new digital reporting requirements are phased in. The agency's inability to fully prepare for these changes, compounded by the absence of the Direct File program, suggests taxpayers may face longer wait times and less reliable service. This situation underscores the importance of early preparation for self-employed and property-owning taxpayers, who must adapt to digital record-keeping and quarterly submissions. The current staffing crisis may also influence future policy debates about funding and modernization of the IRS, as the agency struggles to meet increased demands with fewer resources.
What the papers say
Business Insider UK reports that the IRS's workforce shrank by 27% in 2025, with experienced staff leaving, which could lead to slower refunds and lower service quality. The New York Times highlights that the law will reduce individual taxes by $129 billion in 2025, with refunds potentially up to $1,000 higher, but warns that staffing cuts and backlog issues may hinder timely processing. The Mirror emphasizes upcoming digital reporting rules for self-employed and property owners earning over £50,000, urging early preparation to avoid penalties, and notes that the IRS's staffing issues could exacerbate compliance challenges. These contrasting perspectives reveal a complex picture: taxpayers stand to benefit from higher refunds and new benefits, but face operational hurdles due to staffing shortages and procedural changes.
How we got here
The new law, passed under President Trump, introduced sweeping tax measures including no tax on tips or overtime and expanded child credits. Meanwhile, the IRS's workforce shrank by 27% in 2025, reducing experienced staff and impacting its capacity. The agency also faced pandemic-related backlogs and eliminated its Direct File program, complicating tax processing and refunds. These factors set the stage for potential delays and service issues this tax season.
Go deeper
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Donald John Trump is an American politician, media personality, and businessman who served as the 45th president of the United States from 2017 to 2021.
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The Tax Foundation is a Washington, D.C.-based think tank, founded in 1937, that collects data and publishes research studies on U.S. tax policies at both the federal and state levels.