The Trump administration’s IRS cuts undermined filing season performance

Trump administration officials have denied that the Internal Revenue Service’s 2025 staff cuts—that is, cuts of employees who assist struggling taxpayers and sift through vast amounts of paperwork to process returns—had negative consequences. “No staffing shortages here,” claimed IRS CEO Frank Bisignano during the 2026 tax filing season, which opened on Jan. 26 and closed on April 15. Despite the agency cutting its workforce by 31,000 (28%) in 2025, Bisignano claimed that the 2026 filing season was “the best season we’ve ever had.” However, reports from independent oversight bodies like the Taxpayer Advocate Service (TAS), an organization within the IRS that works to solve individual and systemic issues at the agency, indicate otherwise. The staffing reduction had serious consequences, including return processing backlogs and reduced phone assistance for taxpayers.

The administration began cutting the IRS workforce shortly after inauguration in January 2025 and pushed staff out throughout the entire year. Over 20,000 employees took Deferred Resignation Programs allowing them to temporarily keep their pay and benefits after resigning. Thousands resigned as the administration attempted to terminate recent hires who were still within a “probationary” period. By January 2026, the Taxpayer Services Division—which handles return processing, taxpayer correspondence, and telephone assistance—had lost approximately 11,000 (26%) of its employees. As staffing decreased, the agency struggled to compensate for its capacity loss. Overtime hours (paying 1.5 times a worker’s typical wage) increased by 12% at the agency in the first nine months of 2025 compared to the same period in 2024. Overtime hours were concentrated in taxpayer services.

Despite the efforts of the agency’s remaining employees, the predictable result of the staff cuts was performance declines. The Government Accountability Office (GAO) reported that the average paper return processing time increased from 27 days in fiscal year 2024 to 36 days in fiscal year 2025. The Treasury Inspector General for Tax Administration (TIGTA) indicated that the number of tax returns and cases awaiting processing in key tax return processing programs increased by a third leading up to the 2026 filing season. Paper tax returns awaiting processing increased fivefold.

Amid looming backlogs and service shortfalls, the agency began to hire again in August 2025—just seven months after staff cuts began. The IRS was not the only agency to hire and rehire people in 2025—others did as well once the consequences of the cuts to agency and program performance began to be understood. The agency was authorized to hire about 5,400 additional workers: 3,500 accounts management employees, who are responsible for taxpayer correspondence, and 1,900 submission processing hires, who process tax returns.

Just weeks before the 2026 tax season began, however, the agency was still struggling to onboard employees. By Jan. 1, the agency had onboarded only 66% of the accounts management employees and just 3% of the submission processing employees that it was approved to hire. GAO noted that an internal IRS report in December 2025 “stated that return processing and customer service functions would enter the season undertrained or understaffed, which could result in errors and poor service for taxpayers.” To mitigate the effects of the understaffing, the IRS scaled back the scope of its training for the new hires and reduced its phone service goals.

The IRS faced a dilemma for the 2026 filing season. As the Taxpayer Advocate Service wrote, “the IRS lacks the staffing levels and technology necessary to provide both high-quality telephone service and timely case processing simultaneously.” In other words, the agency had to choose between prioritizing return processing and prioritizing phone assistance.

The understaffed IRS prioritized return processing—but not without consequences. A resulting decline in phone service is clear. TAS data shows that the average number of minutes that taxpayers spent to reach a customer service representative increased from eight to 14 minutes during the 2026 filing season—approximately a million extra taxpayer hours spent waiting before an IRS employee picked up the phone.

The filing season Level of Service, a measurement of how many taxpayer calls routed to customer service representatives were answered, also declined from 70% in 2025 to 56% in 2026. These performance declines are especially alarming because these measurements tend to overstate IRS performance.

Despite the agency’s prioritization of paperwork and attempts to restaff, inventories requiring manual processing—that is, unprocessed returns and taxpayer correspondence—increased by 17% compared to the 2025 season. These backlogs have consequences. For example, a refund being held because the IRS needs identification verification from a taxpayer will be delayed if the taxpayer’s response sits unprocessed for weeks. Noting the growth of return processing backlogs, the agency requested and received special authority to rapidly hire 8,000 employees in late February 2026, well into the filing season.

Performance declines caused by understaffing would have been even larger if not for an unusual compensatory action taken by the IRS. The agency involuntarily assigned around 1,200 of its information technology and human resources employees to process returns and assist customer service representatives. Many of these employees had no prior experience in taxpayer services work, which is complex, and hundreds of them failed their initial certification exams.

The administration’s defenses of the staffing cuts typically highlight the ability of technology to enhance the agency’s performance. But as TIGTA noted, programs like the agency’s paper digitization initiative have faced delays and are not ready to pick up the slack. Staffing cuts can also undermine the implementation of technology. For example, paper return processing was initially delayed for the 2026 filing season because critical computer system updates were not completed by the agency’s Information Technology Division, which lost 29% of its staff, until mid-February 2026.

Technology can, of course, enhance the functioning of the agency—and consistent improvements to the agency’s digital filing system since 1986 are a key reason why most taxpayers had a typical filing experience this year despite staffing cuts. But the administration’s efforts at the agency also undercut recent investments in modernization. For example, the administration discontinued Direct File, the agency’s successful in-house free tax filing software, last year.

Independent oversight organizations like GAO, TIGTA, and TAS will continue to release invaluable performance reports on the agency that provide insight into the full impact of the cuts. To date, though, the agency’s performance has declined, and the consequences of staffing shortages were concentrated among the millions of taxpayers who require individualized assistance. The agency’s decline and subsequent scramble to hire thousands of employees demonstrate an obvious truth that was apparent long before the cuts: Technological improvements simply have not removed the agency’s need for a properly staffed workforce. The Trump administration overlooked this need, and taxpayers are worse off because of it.