IRS Workforce Reductions & Hiring Freeze: What This Means for Taxpayers in 2025

While there is conflicting information, the IRS is currently indicating shifts toward workforce reductions and hiring freezes. 

Under the Trump administration, workforce reductions and significant budget cuts are looming. This sharp change highlights questions about audit activity, refund delays, and overall service quality.

Let’s break down what these IRS staffing changes mean for taxpayers—and why it matters now more than ever.

IRS Staff Layoffs as of 2025: What We Know So Far

In 2023, the IRS announced plans and workforce goals:

• Hire 30,000 new employees over the next two years
• Increase its workforce by 45% between 2023 and 2025

As of 2025, the IRS plan has shifted:

• A presidential executive order on January 20, 2025, created a federal hiring freeze that impacted federal agencies, including the IRS. 
• These potential layoffs affect up to 30,000 employees and suggest a 40% decrease in the IRS workforce. 
• Targeted reductions in customer service and paper return processing roles are being cut to shift the workforce to automation and AI initiatives
  
  

These workforce changes to the IRS are happening while the agency is still recovering from COVID-era backlogs and modernizing its digital systems.

“I believe through smarter IT, through this AI boom, that we can use that to enhance collections....I expect collections would continue to be very robust...”, stated US Treasury Secretary Scott Bessent on May 6, 2025.

How Technology Is Replacing Manual Labor in the IRS

One major factor impacting the IRS workforce reduction is the AI boom and technology automation. In recent years, the IRS increased its use of:

• Automated call handling
  
  
• AI-driven taxpayer correspondence
  
  
• Digital form scanning and error correction
  
  

These updates to the IRS workforce are designed to streamline operations, but critics warn that aggressive AI rollout could outpace proper oversight and human support.

Example: A taxpayer submitting an amended return may face increased delays if manual processors are replaced too quickly.

How IRS Layoffs May Affect You As a Taxpayer

The average taxpayer may experience some delays and inconveniences from the ongoing IRS staffing changes. These effects include:

Longer Wait Times for Refunds

Even with AI technology, fewer staff may result in delays, specifically for paper returns, amendments, or identity verifications.

Fewer Audits For Low-Risk Taxpayers

AI technology will prioritize higher-risk taxpayers. These high-risk taxpayers include self-employed individuals and crypto investors.

Fewer Customer Support Representatives

As automated call handling increases, human call centers shrink. This may mean reaching a live agent for help could prove more difficult during tax season.

What Should You Do As a Taxpayer During These Changes to the IRS Workforce?

In light of the uncertain IRS workforce shifts, here are a few proactive steps to take as a taxpayer:

• File early to avoid delays. This is especially true if you're expecting a refund.
  
  
• Double-check your return for errors. Fewer errors mean faster processing time.
  
  
• Keep digital copies of all forms and receipts to minimize paperwork.
  
  
• Consult a tax pro if your tax situation is complex or involves past IRS notices.
  
  

Tip: Tax Attorney of America offers access to professionals skilled in audit protection and filing assistance who are trained to adapt to these IRS changes.

Conclusion: The IRS Is Changing, So Should Your Tax Strategy

As the IRS moves toward an AI and tech future, taxpayers need to stay informed and adapt. While faster digital services will improve the overall IRS system, the transition period will certainly come with growing pains. 

Partner with a trusted tax expert through Tax Attorneys of America to get help navigating your 2025 tax season with confidence.

Schedule a free consultation today.