As tax season unfolds, Trump’s federal hiring freeze casts doubt on the IRS’s ability to efficiently manage taxpayer demands.
Key Takeaways
- President Trump enacted a federal hiring freeze that lasts 90 days, excluding the IRS.
- The IRS revoked job offers with start dates after February 8, 2025, due to the hiring freeze.
- In response to the freeze, the IRS plans to reallocate existing workers to manage tax filings.
- Experts advise individuals to adjust withholding arrangements to mitigate refund delays.
- The American Institute of CPAs monitors the potential impact on IRS operations.
Federal Hiring Freeze and the IRS
President Donald Trump signed an executive order enforcing a federal hiring freeze, which will last for 90 days and has sparked concern among agencies like the IRS. Despite the agency receiving some exemptions, this freeze restricts new hires and threatens the IRS’s ability to efficiently process a projected 140 million individual tax returns this season, which extends until April 15.
The IRS has announced that job offers with start dates post-February 8, 2025, will be revoked. This move necessitates redeploying existing workforce to accommodate seasonal workloads. Additional support might come from seasonal employees who have already been hired and trained to work during the critical period from January through May.
Managing Tax Season Amid Staffing Challenges
The American Institute of Certified Public Accountants (AICPA) expressed concern over the hiring freeze’s impact on IRS operations, though they acknowledge the agency’s efforts to manage the situation by reallocating staff from other departments. “We are greatly sensitive to the filing season service challenges for members and taxpayers,” stated Melanie Lauridsen of the AICPA.
“Every facet of IRS operations will be significantly impacted by the current hiring freeze. Fortunately, IRS employees are resilient.” – Charles Rettig
Experts advise taxpayers to adjust their withholding allowances and increase retirement contributions to reduce dependencies on annual refunds given potential delays. Tracking deductible expenses and considering quarterly estimated payments are also recommended strategies to minimize the impact of administrative bottlenecks.
Future Implications and Workforce Dynamics
The hiring freeze might not be as detrimental as anticipated. Dr. Steven Hamilton notes, “The IRS will function much better today and in the upcoming filing season with this hiring freeze than they would have, say, four years ago,” largely due to a staff increase facilitated by the Inflation Reduction Act, which allocated $80 billion to enhance IRS operations.
Furthermore, another executive order ending remote work could result in retirements within the IRS, possibly affecting operations during the filing season. This scenario may necessitate substantial adjustments to maintain efficiency during critical periods.
