Irs Suffering Filing-season Staffing Shortfall After Layoffs, Watchdog Report Says

The IRS has fallen far short of its staffing targets for customer service roles during tax-filing season, according to a draft government report seen by POLITICO that underscores challenges the agency faces delivering new GOP-led tax breaks after a year of sweeping Trump administration cuts.

Between Jan. 26, the day federal tax-filing season opened, and Feb 27, the IRS brought on just 21 percent of the 2,200 people hired for taxpayer-facing roles in its submission processing unit, which handles original and amended tax returns, according to the report compiled by the Treasury Inspector General for Tax Administration.

The agency’s accounts management unit, which handles phone calls and mail from taxpayers and processes adjustments, initiated 66 percent of new staff over that same period, according to the report, which has yet to be released publicly.

As a result of the staff shortage, the draft report says, the agency is backfilling those open positions with employees from other divisions. But those workers need to undergo months of training, meaning they won't be ready to handle taxpayer requests until well after next week's filing deadline.

The inspector general is reviewing the personnel crunch in the first tax filing season since the Trump administration pushed out 25 percent of the agency’s staff through mass layoffs and early retirements, including tens of thousands of people in its taxpayer services department. The findings suggest that President Donald Trump’s dramatic cuts to the federal bureaucracy may pose a challenge to the centerpiece of the GOP’s midterm election messaging — the delivery of tax relief enacted last July.

Republicans are counting on IRS customer service being robust enough to ensure taxpayers can claim new programs created last year by their “big, beautiful bill,” such as deductions for overtime wages, tipped income and auto-loan interest.

But some of these deductions come with opaque guidance, and bottlenecks in these units could mean taxpayers wait longer to get questions about the tax code answered by IRS agents.

IRS Chief Executive Officer Frank Bisignano told the House Ways and Means Committee on March 4 that “we feel really good about the staffing levels” and that “wait times on the phone are single digits.” In an interview last month, he said the IRS is improving its technological capabilities and has conducted “tens of millions of more online transactions than we did before.”

The draft report appears to challenge part of that assessment.

The IRS has moved more than 800 people from the chief of staff’s office to submissions processing and account management to compensate for the staffing deficiencies, the draft report finds. Those workers, after 12 weeks of training, “should be able to help with inventory around late May 2026,” well after the end of federal tax filing season, the document says. The agency also “plans to increase overtime usage throughout the fiscal year to mitigate any negative impact of their hiring shortfalls.”

Bisignano, who is also commissioner of the Social Security Administration, is scheduled to appear before the Senate Finance Committee for the first time in his IRS role on April 15, where he’ll face questions on the filing season and the agency writ large.

“There’s no getting around the fact that the changes DOGE made to the IRS are inefficient and wasteful," Sen. Elizabeth Warren (D-Mass.), a member of the Finance Committee, said in a statement to POLITICO, referring to the administration's Department of Government Efficiency initiative to reshape the federal workforce. "Instead of playing politics with the IRS, Bisignano and the Trump administration should focus on getting help to the taxpayers who need it.”

Senate Finance Chair Mike Crapo (R-Idaho) declined to comment on the draft report.

Pete Sepp, president of the conservative-leaning National Taxpayers Union, said the administration’s moves to destabilize the federal workforce did not appear to be “strategic” and could make IRS recruitment more difficult.

“Post-filing season will have some instructive lessons as well,” he continued. “Will those who have received follow up notices like math errors or examination notices be able to get in touch with qualified staff at IRS to assist them?”

The IRS and the inspector general's office declined to comment. The IRS typically responds to TIGTA’s findings in letters included in the watchdog’s reports.