New IRS Leadership Faces Tax Season Hurdles: What This Means for You

Tax forms and documents overlapping on surface

Leadership changes at the IRS during peak tax season strain an agency already overburdened with returns, inquiries, and technical issues.

Key Takeaways

The IRS is experiencing significant turmoil, with three acting directors in one week and impending layoffs and retirements.
President Trump is influencing which nonprofits should lose tax-exempt status, potentially politicizing the IRS.
The IRS processed over 117 million returns and issued $228.7 billion in refunds this tax season.
Trump’s nominee for IRS commissioner, Billy Long, faces scrutiny over alleged tax credit loopholes.
Employee morality is affected due to leadership turnover and loss of institutional knowledge.

IRS Faces Leadership Instability

The Internal Revenue Service is facing unprecedented turmoil, with multiple acting directors stepping in within a single week. An ongoing wave of retirements and layoffs has left the agency struggling to handle the volume of tax returns and inquiries from taxpayers. Employee morale is low, further compounded by disagreement over policies and uncertainty regarding their job security.

Amid these challenges, the IRS has managed to process over 117 million returns and issue $228.7 billion in refunds. However, as the leadership continues to churn, the agency’s capacity to keep operations running smoothly is in question. The looming threat of delays in taxpayer services and tax collection efforts only heightens public frustration, eroding confidence in an already strained system.

Political Influence and Modernization Efforts

President Trump’s influence over IRS policies, especially concerning the tax-exempt status of certain nonprofit organizations, has engendered widespread concern. The potential politicization of the IRS could alter its nonpartisan functioning, challenging the agency’s integrity and operational transparency. Additionally, the IRS attempts to revamp its systems under the guidance of the new acting commissioner, Michael Faulkender.

The acting IRS chief and other senior officials are leaving, extending a period of turmoil at the tax agency https://t.co/l6fiMJJRV9

— The Wall Street Journal (@WSJ) April 9, 2025

Those in leadership advocate for improvements aimed at addressing systemic inefficiencies, yet critics remain skeptical about the agency’s ability to adapt amid current pressures. The new acting commissioner aims to streamline operations, but the success of these initiatives remains uncertain with existing financial constraints and internal resistance.

Resilience Tested Amid Broader Challenges

Beyond leadership instability, the IRS contends with a controversial data-sharing agreement with the Department of Homeland Security. This arrangement allows for the verification of immigrant tax records by ICE, part of the broader immigration enforcement agenda. The agreement faces legal challenges that question its validity and potential privacy violations.

Amid these competing priorities and legal battles, the IRS’s ability to function effectively in its core duties of tax collection and taxpayer services is increasingly threatened. Maintaining public trust is essential for IRS operations, and the current crisis tests the organization’s resilience and operational integrity.