The IRS reported one of its most successful tax seasons in recent years, collecting $850 billion in April—a 9.5% increase over last year—and another $371 billion in May, a 14.7% jump, according to Treasury Department data. However, those gains were achieved just before a significant reduction in staffing: more than a quarter of the IRS workforce has exited in the past three months, many through buyouts tied to Elon Musk’s U.S. DOGE Service initiative. The reduction was detailed in the National Taxpayer Advocate’s latest report, which warns that the IRS may not be equipped to handle next year’s filing season, especially if new legislation is enacted.
The agency has seen deep losses across nearly every unit. Over 2,000 IT staff have left, and critical administrative bodies like the Transformation and Strategy Office have been nearly dismantled. Customer-facing roles have also suffered, with over 9,000 employees in the Taxpayer Services division departing—despite the Trump administration’s stated goal to preserve public service functions. A federal hiring freeze has prevented the IRS from bringing in replacements. While 98% of returns were processed on time this year and hold times dropped significantly, officials caution that expected tax law changes, including those proposed in the “One Big Beautiful Bill Act,” could overwhelm the understaffed agency in 2026.
