Federal government's IT workforce shrinks significantly since Trump's presidency commencement
The National Taxpayer Advocate Service (TAS) has raised concerns about the potential impact of staffing cuts and departures at the Internal Revenue Service's (IRS) Information Technology (IT) department on the upcoming 2026 tax season.
Since early 2025, the IRS has seen a significant reduction in its workforce, with over 2,000 IT employees leaving due to programs like the Deferred Resignation Program (DRP) and reduction-in-force (RIF) actions. This has led to an overall workforce reduction of 25-26% by mid-2025[1][3][4].
The IRS's IT workforce has been particularly hard-hit, with a reduction of 27% as of late June, representing a 2% increase from the previous month's data[2]. Moreover, 23% of IT management (1,853) have also left the IRS[3].
These staffing declines pose several operational risks for the 2026 tax filing season. Reduced IT capacity could hinder essential tasks such as reprogramming IRS processing systems to incorporate new tax legislation and ensure smooth electronic filing and return processing[3][4]. The IRS's fiscal 2026 budget request includes large proposed cuts (~60%) in technology and operations support staffing and nearly 40% in IT spending[3][4].
Operational challenges also loom as the IRS faces increased workloads, especially if Congress enacts complex tax legislation that adds to processing complexity and the need for system updates[4]. This puts pressure on the IRS to deliver timely and accurate tax return processing during the filing season despite diminished resources[4].
The potential consequences of these staffing challenges could include increased errors and delays. Reduced staffing in tax examiners and revenue agents, alongside IT constraints, may lead to slower audits, delayed refunds, and increased error rates due to overburdened personnel and less effective system support[1].
The TAS report also notes that changes and cuts in the IT department could leave IRS managers vulnerable to increased workplace challenges, potentially affecting morale and agency stability during a critical period[3].
The TAS report highlights the looming operational risk for the upcoming filing season due to these workforce reductions and the complexity of new tax laws, emphasizing the need for the IRS to prepare now despite these staffing challenges[4].
Furthermore, the TAS report raises concerns about the lack of disclosure about the IRS's IT modernization efforts to the public and Congress[6]. The report mentions IT modernization efforts at the IRS, including working with DOGE, are essential to make future tax seasons go smoothly[7].
The SB/SE and taxpayer services units have also seen significant staff reductions, each shedding more than 8,500 people[5]. Erin Collins, the TAS chief and National Taxpayer Advocate, called out staff cuts as a concern in the 2026 Congressional Objectives Report[5].
In conclusion, the workforce reductions and IT staff departures jeopardize the IRS’s ability to efficiently process tax returns, implement tax law changes, and manage audits in the 2026 tax season, increasing the risk of delays, errors, and taxpayer frustration. The TAS report underscores the urgency for the IRS to address these staffing challenges and ensure a smooth 2026 tax season.
[1] https://www.irs.gov/newsroom/irs-staffing-levels-and-workforce-reductions [2] https://www.forbes.com/sites/danielgye/2022/06/30/irs-it-workforce-reduced-by-27-in-june-national-taxpayer-advocate-warns-of-disaster-for-2026-tax-season/?sh=59984c32d5f8 [3] https://www.accountingtoday.com/news/irs-staffing-cuts-could-jeopardize-2026-tax-season-advocate [4] https://www.accountingtoday.com/news/irs-staffing-cuts-could-jeopardize-2026-tax-season-advocate [5] https://www.accountingtoday.com/news/irs-staffing-cuts-could-jeopardize-2026-tax-season-advocate [6] https://www.accountingtoday.com/news/irs-staffing-cuts-could-jeopardize-2026-tax-season-advocate [7] https://www.accountingtoday.com/news/irs-staffing-cuts-could-jeopardize-2026-tax-season-advocate
- The IRS's proposed budget for fiscal 2026 includes significant cuts in technology and operations support staffing and IT spending, potentially hindering the IRS's ability to smoothly implement new tax legislation and ensure efficient electronic filing and return processing.
- As AI-based technology continues to advance, there's a growing need for the IRS to invest in and sustain its technology department for effective tax administration and business operations during complex tax seasons.
