IRS shuts down most operations after depleting unused funds

Core Insights - The IRS has significantly reduced its operations and workforce, which may hinder its ability to process tax returns effectively during the upcoming tax season [3][4][7] - Staff reductions have led to an increase in the number of tax returns requiring adjustments, potentially reaching 6 million, which is 2 million more than during the pandemic [6] Workforce Reductions - The IRS experienced a 19% reduction in staff in departments managing tax filing due to cuts from the Trump administration [3] - The department responsible for processing tax forms laid off 1,930 employees, impacting the handling of unprocessed forms from the previous year [4] - An 18% reduction in the fraud detection department may lead to $360 million in illegitimate refunds [4] Operational Impact - The IRS cut 4,147 employees, or 17% of the staff, in the department handling taxpayer communications and adjustments to tax accounts [5] - To address service levels, the IRS began hiring approximately 3,500 new employees in August [5] - The agency halted most operations and furloughed non-essential employees after utilizing funds meant for technology upgrades and workforce rebuilding [7]