The Trump Administration’s saving measures are now impacting taxpayers in one of the most crucial times of the year. When tax season began in January, the Internal Revenue Service (IRS) still did not know what impact the Trump Presidency would have on their ability to process the tax returns for the year 2024, but it seems like we have the answer now.
The Associated Press reported that just during the month of February, the IRS had let go of 7,000 employees with many of the affected having been with the agency for a year or less. The layoffs hit tax compliance units, departments responsible for making sure individuals accurately report earnings and adhere to filing requirements, and have effectively crippled the expected infrastructure for this year’s tax season. And what is worse, recent reports suggest that the IRS is considering a dramatic workforce reduction, potentially cutting its 90,000-employee roster in half. The downsizing would be carried out through a mix of layoffs, voluntary buyout offers, and a freeze on new hiring.
Should this happen, several crucial departments that help assist Americans with taxes will be affected, like the IRS’ Taxpayer Advocate Service branch, which helps Americans facing financial issues, is set to be cut by 20%. The IRS’ Direct File department, the online tool that allows taxpayers to file their federal taxes for free electronically, will also let go 30% of its staff.
The impact of this measure on the IRS
As with all other mass layoffs, court decisions in states like Maryland and California have ensures that the decision is reverted, forcing the IRS to rehire the workers. While most of them have been put on paid administrative leave while the Trump administration goes through the appeals process, some of them have returned to their posts. In fact, the situation has been declared so dire inside the IRS that there is now a plan for most of them to return to their work full-time on April 14 to help with all the filings (remember that April 15 is the last day to file taxes in the country).
Since processing is such a laborious job, the IRS will need as many of their workers as they can manage to scrounge up and it shows. In an email sent to those that will be recalled, the agency expresses that those that have had to get another job in the interim to support themselves and their families will not have to give up said job to return to their post, clearly stating “Please know that outside employment does not necessarily prevent you from returning to work,” read the email.
The situation is quite dire and not just for IRS employees. The Department of Government Efficiency (DOGE) run by Elon Musk has forced the layoff of over 59,000 government employees and seeing the writing on the wall, over 136,000 federal employees have chosen to quit and find a job in the private sector. This has meant that many government departments are now failing and the paperwork and tasks they are responsible for are falling by the wayside.
Considering that the Trump administration’s main goals are to “eliminate unnecessary programs” and “reduce bureaucratic inefficiency,” it seems counterproductive to eliminate so many positions so fast and without reducing the amount of tasks that workers have to perform.
The goal with the IRS seems different. In an interview with Fox News, U.S. Secretary of Commerce Howard Lutnick gave insights to the plans that President Trump has for this specific agency “Donald Trump announced the External Revenue Service, and his goal is very simple: to abolish the Internal Revenue Service and let all the outsiders pay.”
This ludicrous plan would be achieved by replacing the IRS with an agency that collects tariffs from to fund the entirety of the government.