How The IRS Layoffs Could Affect Your Tax Refund

The recent Internal Revenue Service layoffs could delay or cause mistakes in taxpayers’ refunds, but filing your taxes soon, correctly and electronically could prevent these issues

As part of President Donald Trump’s mission to reduce the federal government’s expenses, about 7,000 IRS employees were laid off on Thursday. This is about 7% of the total IRS workforce, the Washington Post reported. Most of the cuts affected the enforcement and collections section.

Additionally, the federal hiring freeze initiated by Trump when he was inaugurated may have affected the number of seasonal employees available, said Crystal Stranger, an enrolled agent and CEO of Optic Tax. According to the U.S. Government Accountability Office, these workers support the agency during tax season and represent between 11% and 20% of the agency’s total workforce from 2013 to 2022.

“It’s not just delays in refund processing, but you may receive more, or you may receive less than your refund, and if you do, you want to double check that because it could be a mistake on the IRS,” Stranger said.

File Sooner Rather Than Later and Electronically

The best way to avoid a delay or mistake in your tax refund is to file your return electronically, said Tom O’Saben, director of tax content and government relations at the National Association of Tax Professionals. Since your tax return will be processed automatically, this reduces the amount of time and errors that could occur compared to filing by paper.

“This could end up being a non-event to most taxpayers if they approach their tax filing by being prepared,” O’Saben said. “Make sure that their information is all accurate. Verify social security numbers for everybody in the family.”

In addition, filing your tax return before the April 15 deadline can significantly reduce the time it takes to receive your tax refund. If a large volume of tax returns come in at the same time, this could cause a system shutdown.

“The normal expected time is somewhere between 14 and 21 days for a direct deposit,” O’Saben said. “Certainly, that could slow down if there are systems errors, and they’re limited in staff to come in and fix those.”

O’Saben said patience is key. Instead of calling the IRS, use the agency’s online “Where’s My Refund” tool to track your refund quickly.