Tax season is always hectic for taxpayers, CPAs, and the IRS alike. This year, however, has brought a new flurry of activity on top of the usual busyness that comes with the approaching tax deadline. We’re talking about the recent mass layoffs at the IRS, just one of the federal agencies that Elon Musk’s Department of Government Efficiency (DOGE) has reduced in size recently. If you’re concerned about how the loss of those IRS workers will impact you and your tax return, you’re not alone. While we certainly don’t have all the answers, here’s what tax experts are saying about the potential effects this will have on tax returns and refunds this year.
Who’s Been Laid Off?
At the moment, an estimated 7,000 probationary employees at the IRS have been dismissed, according to the Washington Post. For reference, there are roughly 84,000 IRS employees, equating to a staff reduction of around 8%. These cuts have primarily occurred in the Small Business Self-Employed Division, and not the Wage and Investment Division, which handles most taxpayers’ returns.
Will It Impact Your Return?
According to experts, odds are that most taxpayers won’t experience a significant delay in the processing of their return or refund. In fact, the former IRS Commissioner stated that “there should not be a significant impact on current filing season operations,” Time Magazine. Of course, that’s assuming your return is filed (1) electronically, (2) correctly, and (3) fairly early in the season. If you meet these three criteria, your return can be processed by a computer, without the need for an actual staff member to handle it.
Taxpayers whose returns require manual review are more likely to experience a delay. After all, fewer bodies in the buildings mean fewer eyes on paper returns or returns with errors and “red flags” attached to them. If you need to communicate directly with the IRS, you should expect longer wait times, as well as an increased chance of dropped calls.
How Can You Avoid These Issues?
If you’re concerned about your return or refund being delayed—and many of our clients are—there are a few things you can do to reduce the chance of that happening:
1. File Electronically: Paper copies of returns need to be opened and handled by a human being. As we saw during COVID, the IRS can get backed up very quickly on these paper returns when they don’t have sufficient staff in the building. Filing electronically allows the return to be processed electronically, and that can move things along much, much more quickly. If you submit a payment with your return, doing it electronically is even more important; if processing a physical check gets delayed by staff layoffs, your payment might be marked as late, and you could end up with late fees that you shouldn’t owe.
2. Double Check Your Work: Small errors like a missing SSN or birthdate can flag your return for review by a staff member. This could land your tax return in a long queue and cause your refund to be delayed. Take the time to make sure everything is filled out correctly before you submit your return.
3. File as Soon as Possible: The deadline is barely more than a month away and approaching quickly. It’s important to get your return in as soon as possible in order to reduce the likelihood that you experience delays on your refund.
Make tax season stress-free with The Accounting Guys, your trusted Provo tax professionals. We specialize in accurate and efficient business tax filing, ensuring you maximize deductions and receive your refund faster.
Don’t let tax delays hold you back— Contact Us today for expert tax preparation in Provo!