IRS Mass Layoffs: Impact on 2023 Tax Season
Amidst the Trump administration's efforts to reduce federal bureaucracy, the IRS has commenced layoffs of over 6,000 employees, raising concerns about its impact on this year's tax season.
Potential Disruptions to Tax Filing Season
The White House aims to minimize taxpayer inconvenience, but mass layoffs have targeted enforcement staff, potentially leading to processing delays. Ex-Biden officials highlight the critical role of all IRS staff during tax filing season, expressing concerns that cuts will hinder the IRS's capacity to handle the influx of returns.
Customer Service Impacts
According to Lily Batchelder of New York University, layoffs affect major functions like taxpayer services and IT. These cuts could result in delayed or inaccurate refunds.
Collections and Enforcement Challenges
Former IRS officials predict that the loss of enforcement agents could exacerbate the tax gap, estimated at $271 billion annually. Without sufficient agents, the IRS's ability to combat tax evasion may be compromised.
Future Layoff Prospects
The Trump administration has focused on probationary employees but may consider deeper cuts at the IRS. Recent confirmation of Howard Lutnick as Commerce Secretary suggests a potential plan to abolish the IRS and implement a tariff-based revenue system.
Code Integrity Concerns
Ex-Biden officials express apprehension over reports that staff from Elon Musk's Department of Government Efficiency have accessed IRS data systems. Unintended alterations could disrupt the processing of millions of refunds.