The IRS Lost 19,000 Workers This Year and Tax Refund Delays Are Already Piling Up

Tax season is supposed to be the one time of year that millions of Americans actually look forward to hearing from the federal government. The average refund last year topped $3,100, a meaningful sum for households wrestling with elevated grocery bills, rising insurance premiums, and stubborn credit card balances. But this year, the Internal Revenue Service is heading into the busiest stretch of its calendar with fewer hands on deck than at any point in over a decade.

According to a report released this week by the Treasury Inspector General for Tax Administration (TIGTA), the IRS has lost approximately 19,000 employees over the past twelve months. The departures stem from a combination of hiring freezes, early retirement offers, and the broader federal workforce reductions that have reshaped agencies across Washington. The result is an agency that opened its filing season on January 27 with a staffing level that TIGTA describes as "insufficient to meet projected demand."

Phone Lines and Processing Backlogs

The most immediate consequence is already visible on the agency's phone lines. The IRS has quietly lowered its telephone service target from 85% to 70%, meaning that three out of every ten callers who need live assistance may not get through. To compensate, the agency has temporarily reassigned employees from departments including human resources and information technology to answer phones and assist with return processing. Some of these reassigned workers have no direct tax experience.

"We are deploying every available resource to ensure taxpayers receive their refunds as quickly as possible," an IRS spokesperson said in a statement. Treasury Secretary Scott Bessent added that the department is working to integrate artificial intelligence tools to improve customer service and reduce pressure on call centers, though he acknowledged those systems are still in early stages.

Who Faces the Biggest Risk of Delays

For taxpayers who file electronically and use direct deposit, the timeline may not change dramatically. The IRS says it still expects to process most straightforward e-filed returns within 21 days. But the real vulnerability lies in the returns that require human review. Paper filings, amended returns, those flagged for identity verification, and cases involving mismatched income data all require manual handling, and that is precisely where the staffing shortage bites hardest.

Last year, the IRS had a backlog of roughly 4.4 million unprocessed returns at the peak of filing season. With 19,000 fewer employees, analysts at the Taxpayer Advocate Service warn that number could swell considerably in 2026. The Advocate's annual report to Congress, released in January, flagged "severe staffing constraints" as the single largest risk to taxpayer service quality this year.

The DOGE Factor

The workforce reductions at the IRS are part of a broader federal downsizing effort that accelerated in 2025 under the Department of Government Efficiency initiative. While DOGE proponents argue the cuts have eliminated redundancy and saved taxpayer money, critics counter that the IRS is one of the few federal agencies that generates far more revenue than it costs to operate. Every dollar invested in IRS enforcement has historically returned between $5 and $12 in additional tax collections, according to Congressional Budget Office estimates.

The practical effect of the cuts extends beyond refund timelines. The IRS has also scaled back its walk-in Taxpayer Assistance Centers, closing or reducing hours at dozens of locations nationwide. For low-income filers, elderly taxpayers, and those without reliable internet access, the loss of in-person help can mean the difference between filing correctly and making costly errors.

What Taxpayers Should Do Right Now

Tax professionals are urging filers to take several precautionary steps this season. First, file electronically and opt for direct deposit. Paper returns are processed significantly more slowly under normal conditions, and the gap will only widen this year. Second, double-check all income documents, including W-2s, 1099s, and any records of freelance or gig income, to minimize the chance of a mismatch that triggers a manual review.

Third, use the IRS "Where's My Refund?" tool or the IRS2Go mobile app to track your return rather than calling. Given the reduced phone service capacity, hold times are expected to be significantly longer than last year. Fourth, if you are eligible for the Earned Income Tax Credit or Additional Child Tax Credit, be aware that federal law requires the IRS to hold refunds claiming those credits until mid-February, regardless of when the return was filed.

The Bigger Picture

The IRS staffing crisis arrives at a particularly challenging moment. The 2026 filing season is the first to incorporate several provisions of the One Big Beautiful Bill Act, including the expanded $6,000 senior deduction, the elimination of paper refund checks, and changes to the SALT cap. Each of these provisions creates new compliance questions that will generate additional taxpayer inquiries.

Meanwhile, the delayed January jobs report, which was pushed to February 11 after the government shutdown, means that millions of federal employees and contractors may be filing returns with incomplete or delayed income documentation.

For the average American household, the message is straightforward: file early, file electronically, and be prepared for the possibility that your refund may take longer than usual to arrive. In a year when every dollar counts, patience may be the most valuable financial asset of all.