A 27% drop in IRS staffing could impact your refund. Here's how.

Core Insights - The IRS is facing significant staffing shortages, with a 27% reduction in employees compared to the previous year, which may lead to delays in processing approximately 164 million tax returns [1][2] - The One Big Beautiful Bill Act (OBBBA) introduces over 100 changes to the tax code, complicating the tax return process and potentially leading to more errors and delays in refunds due to reduced IRS support [5][6] Workforce Reductions and Delays - The IRS began 2025 with 102,000 employees but ended with about 74,000, with the most severe cuts in Direct File (88% reduction) and Online Services (100% reduction) [1][2] - Seasonal hiring was delayed due to a government shutdown and changes in the hiring process, resulting in only 2% of planned hires onboarded by December 2025 [2][14] - The department responsible for processing returns and resolving errors was only able to onboard 66% of the necessary staff for the tax season [4] Customer Service Impact - The understaffing has severely impacted customer service, with fewer employees available to handle approximately 100 million phone calls and taxpayer correspondence [3] - New employees are limited in their ability to assist taxpayers due to modified training, primarily screening calls and answering basic questions [4] Tax Changes and Complexity - The OBBBA's complex eligibility rules and income thresholds for deductions and benefits may confuse taxpayers, leading to increased inquiries to the IRS for guidance [5] - The small business/self-employed department saw a reduction of over 37%, while the taxpayer services department was reduced by 21% [6] Backlog and Processing Delays - A backlog of 2 million returns from previous years may further slow down the processing of current refunds, as the IRS made little progress during the government shutdown [7] - Efforts to eliminate paper returns and transition to electronic submissions have been hindered by workforce losses, delaying automated processes [8] Refund Processing Expectations - The IRS still expects most refunds to be issued within 21 days of e-filing, despite staffing shortages potentially causing delays [10] - Taxpayers can check the status of their refunds online, with information available 24 hours after e-filing and four weeks after paper filing [11][13]