IRS Staff Cuts and Tax Filing: What Taxpayers Need to Know

Taxpayers are concerned about potential delays and errors in tax refunds due to IRS staff cuts and layoffs. A tax expert advises that those filing accurate electronic returns should not worry, as refunds are still being processed efficiently. The IRS system flags returns that fall outside certain parameters for manual review, which could cause delays. Filing an amended return may take longer due to understaffed processing centers.

Tax preparers recommend filing returns as soon as possible with accurate information to avoid issues. Recent IRS layoffs, part of a federal expense reduction effort, affected about 7% of the workforce, particularly in enforcement and collections. A federal hiring freeze may have also reduced the number of seasonal employees, who support the agency during tax season.

Filing early also helps prevent tax identity theft, where thieves use Social Security numbers to file fraudulent returns. Tax-related identity theft remains a significant problem, with victims facing processing and refund delays. The IRS confirmed over 15,600 identity theft returns through Feb. 29, 2024, an increase from the previous year. Taxpayers are encouraged to use the IRS's online "Where's My Refund" tool to track their refunds.