IN the midst of peak tax filing season, the IRS is cutting over 6,000 employees as part of President Donald Trump’s effort to cut back on government spending.
The mass layoffs are likely to result in delays in the processing of tax refunds, a financial expert with 25 years of experience has revealed.
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The thousands of IRS workers will likely be out of work by the end of this week, according to a source familiar with the agency’s plans.
Around 3,500 of the job cuts are expected to be from just one division at the IRS – the Small Business/Self-Employed Division, or SBSE – per an email shared by an IRS employee and obtained by CBS News.
The email was sent to SBSE managers on Wednesday, sharing that the impacted probationary SBSE workers would be notified of the layoffs today by the IRS Human Capital Office.
“While details are still developing, we understand that over 3,500 SB/SE probationary hires will be terminated by the end of this week,” the email read, stating that the employees facing layoffs “were not deemed critical to filing season.”
However, financial expert Armine Alajian told The U.S. Sun that the job cuts are likely to cause a delay in tax refunds.
“The move to fire 6,000 workers at the IRS may indeed have an impact, because annually, the IRS has to allocate agency resources to meet tax season needs,” said Alajian, a CPA, fractional CFO, tax consultant, and founder of the Alajian Group Inc.
How to check the status of your refund
Americans can check the status of their refunds on the IRS.gov website using the Where’s My Refund? tool.
To see the status, you will need the following information:
- Your Social Security or individual taxpayer ID number (ITIN)
- Your filing status
- The exact refund amount on your return
Once the information is entered, you will see one of the following:
- Return Received – The IRS received your return and is processing it
- Refund Approved – The IRS approved your refund and is preparing to issue it by the date shown
- Refund Sent – The IRS sent the refund to your bank or mailed it to you. It could take up to five days for it to deposit into bank account or several weeks to arrive in the mail
The expert advised taxpayers to file their return electronically and as soon as possible.
“In general, the IRS is extremely difficult to get through, and things take so long. Now, it will be even more difficult due to the strain on resources,” said Alajian.
The financial professional noted that the IRS layoffs were part of Trump’s promised deep cuts across all federal government agencies, an effort led by Elon Musk’s Department of Government Efficiency, or DOGE.
It will reverse the agency’s addition of thousands of employees in recent years to strengthen its customer service and tax collection efforts.
“These employees were hired by the previous administration, and the number of audits have increased since then,” said Alajian.
“They’re laying off those agents that were assigned to those jobs, and now they want to eliminate those audit efforts.”
A CONTROVERSIAL MOVE
Former President Joe Biden signed the Inflation Reduction Act into law in 2022, increasing IRS funding over the next 10 years by $80 billion.
However, the recent IRS layoffs are part of Trump’s efforts to significantly reduce government spending and the federal workforce.
The layoffs are being conducted under an executive order signed by Trump earlier this month that instructed agency heads to collaborate with Musk’s DOGE and initiate “large scale reductions in force.”
In general, the IRS is extremely difficult to get through, and things take so long. Now, it will be even more difficult due to the strain on resources.”
Armine Alajian
The current administration defended the layoffs arguing that over 100,000 people work to collect taxes but “not all of them are fully occupied,” according to Kevin Hassett, director of Trump’s National Economic Council.
Conversely, the IRS layoffs sparked concerns among government watchdogs.
“I just shook my head sadly,” Susan Long, who founded a data collection group at Syracuse University that tracks IRS audits, told NPR.
“It’s just so counterproductive if your goal is to save money and be efficient. This is not what any rational person would do.”
Many tax experts believe that the money saved on IRS worker salaries will essentially be undone by the tax revenue lost resulting from the workforce cut.
“For every $1 that the IRS spends on high-end enforcement activity, the agency collects $12 in uncollected taxes,” said Natasha Sarin, a professor at Yale Law School who served as an advisor on tax policy during the Biden administration.
“What you’re doing is making it harder for us to make progress on waste, fraud and abuse, making the system more inequitable, and ultimately costing trillions of dollars in tax revenue which is owed to the government but which is uncollected,” she said.
The union representing IRS workers has requested that a judge stop the job cuts.
As the IRS plans to lay off thousands of employees, Americans are scrambling to submit their tax returns by the deadline.
However, experts have warned that Americans are losing out on an extra $5,000 on their returns by overlooking an important option when filing.
Plus, check out the five big changes that will impact your tax return amount and the deadline you really can’t miss.
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