A recent report from the Treasury Department’s watchdog warns that, if enacted, President Trump’s 2025 budget bill could disrupt the IRS’s ability to process 2026 tax returns. The IRS is already dealing with staffing reductions. These proposed cuts would likely increase delays for millions of taxpayers.
The root of the problem
The report states that the IRS lost over 25% of its workforce in recent months. Many employees resigned or the agency cut their positions. As a result, the IRS already processes returns more slowly. It offers limited taxpayer support and forces taxpayers to wait longer for help.
Budget bill: More cuts, less capacity
The proposed budget includes deeper reductions to IRS funding. These cuts are part of broader federal spending reductions. Since experienced staff have already left, additional cuts could further slow operations. The watchdog warns taxpayers may face:
- Longer return processing times
- Delayed refunds
- Reduced access to IRS services
These outcomes will make it harder for taxpayers to file accurately. They will also struggle to receive timely refunds or resolve problems when they arise.
Why it matters
Tax seasons run smoothly when the IRS has enough staff. The agency must be able to process returns, answer questions and check for discrepancies. If the IRS lacks support, taxpayers will suffer. This is especially true when the IRS flags a return or starts an audit.
What comes next?
Unless Congress changes the proposed budget, the IRS will likely enter the 2026 tax season with limited capacity. This raises several concerns:
- Will lawmakers increase funding in time?
- Can the IRS rehire staff fast enough?
- How widespread will the disruption be?
If no one acts, taxpayers will face a more frustrating and unpredictable filing process.
The bottom line
When delays and audit risks increase, taxpayers need more than someone to verify the numbers. CPAs and enrolled agents handle numbers. But they do not offer legal defense. If the IRS questions your deductions or challenges your intent, you need a tax attorney.
A lawyer can contact IRS agents directly. They can challenge flawed assumptions and shift the burden of proof when needed. They also guide you through audits, appeals and disputes. That support becomes critical when the IRS struggles to keep up with its workload.