Tax season is already a stressful time, and now, the IRS is facing massive layoffs that could slow down tax return processing, delay refunds, and impact customer service. With 6,700 employees being cut, taxpayers may experience longer wait times and challenges when seeking assistance.
At MCMG Tax, we believe that preparation is key. In this post, we’ll break down the IRS layoffs, their impact on tax refunds, and what you can do to avoid unnecessary delays.
The IRS Layoffs: What’s Happening?
In early 2025, the IRS announced significant staff reductions, eliminating around 7% of its workforce. The majority of these layoffs will affect probationary employees with fewer than two years of service. This decision is part of a broader federal workforce reduction strategy aimed at cutting government spending.
Why Are These Layoffs Happening?
- Budget Constraints: The IRS had been allocated funding for enforcement and modernization efforts, but with shifting federal priorities, funds are now being reduced.
- Automation & AI: The IRS is increasing reliance on technology to streamline processes, meaning fewer human workers are needed for basic tasks.
- Administrative Changes: Changes in government leadership have resulted in restructuring efforts that prioritize cost-cutting over workforce expansion.
How Will IRS Layoffs Impact Your Tax Filing & Refund?
1. Delays in Tax Return Processing
One of the most immediate effects of these layoffs will be longer processing times for tax returns. The IRS typically processes e-filed tax returns within 21 days, but with a reduced workforce, this timeframe could extend significantly—especially for returns that require manual review.
2. Refund Delays
Expect delays in receiving refunds, especially if:
- Your return is flagged for additional review
- You claim certain credits, like the Earned Income Tax Credit (EITC) or the Child Tax Credit (CTC)
- You file a paper tax return
3. Longer Customer Service Wait Times
Trying to call the IRS? You might be in for a long hold time. With fewer agents available to assist taxpayers, customer service phone lines will be overwhelmed. Getting help for tax-related issues could take weeks instead of days.
4. Reduced IRS Audit & Compliance Efforts
Fewer IRS employees mean fewer audits and compliance checks. While this may sound like good news, it could also lead to more fraudulent tax filings that further clog the system.
What You Can Do to Avoid IRS Delays
1. File Early & Electronically
The sooner you file, the sooner you’ll get your refund. With IRS staffing shortages, early filers will have a significant advantage over those who wait until April.
- E-file your tax return to avoid paper processing delays.
- Double-check your information to prevent mistakes that could trigger a manual review.
2. Choose Direct Deposit for Your Refund
Opting for direct deposit instead of a paper check will help you get your refund faster. IRS processing of mailed refunds will likely be slower than usual this year.
3. Use IRS Online Tools
Instead of calling the IRS, use these online tools to get updates:
- Where’s My Refund? to track your refund status
- IRS Direct File to file for free (if eligible)
- Taxpayer Assistance Center Locator to find local help
4. Work With a Tax Professional
If the IRS is short-staffed and slow, now is the perfect time to work with a professional tax preparer like MCMG Tax. Our team can help: ✅ Ensure error-free filing so you don’t get stuck in the backlog
✅ Maximize your deductions and credits
✅ Guide you through IRS notices or refund delays
The Bigger Picture: How This Affects Small Businesses & Self-Employed Individuals
For business owners and freelancers, IRS staffing cuts may mean longer waits for tax transcripts, EIN processing, and business tax return approvals. If you run a business, it’s crucial to stay ahead of deadlines and keep financial records organized.
Final Thoughts: Take Control of Your Tax Filing
The IRS layoffs are beyond our control, but how you prepare for tax season is up to you. By filing early, e-filing, and using direct deposit, you can minimize your risk of refund delays.
📢 Need Help Filing Your Taxes? Contact MCMG Tax Today!
At MCMG Tax, we help individuals, families, and businesses navigate tax season with ease. Don’t wait until it’s too late!
✅ Schedule a consultation now!
📞 Call: 954-228-3414