As reported by Accounting Today, IRS staffing reductions is a shift that could have major consequences for tax administration. These reductions are already impacting practitioners and taxpayers, particularly during tax season when timely IRS support is crucial. 

The IRS is facing significant staffing reductions. The Trusted Professional reported that concerns about the IRS’s ability to meet taxpayer needs have increased after reports that the IRS may be facing one of the largest workforce reductions in its history, with reports indicating that the Trump administration is planning to cut staff by as much as 50% by the end of the year. This would be achieved through a mix of layoffs, attrition and buyouts.

David Shapiro, a partner at Saul Ewing LLP, told Accounting Today that IRS services are slowing down. He shared an instance where a colleague sought guidance from the IRS’s Office of Chief Counsel and was told a ruling might not be possible due to staffing shortages. “In normal times, there would have been no problem,” Shapiro said. “But due to lack of resources, he was told that they might not be able to rule on his question.”

The impact extends to audits and appeals. An appeals officer was terminated mid-case, leaving a taxpayer’s matter unresolved. “Right now the case is in limbo—they don’t have enough personnel to pick up where they fired the appeals officer in an untimely way,” Shapiro explained. 

Beyond audits, the workforce cuts could delay taxpayer assistance for essential services. “Anything where you need people at the IRS will take more time,” Shapiro told Accounting Today, highlighting delays in processing tax IDs for foreign businesses and reserving low-income taxpayer issues.