The Latest at the IRS: Personnel Changes, More Staff Reductions
Mar 21, 2025
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Benjamin Valdez, a Tax Notes IRS reporter, dives deep into the IRS's staffing woes. He discusses the drastic potential cuts of 20 to 50 percent in personnel and the chaos it could create for taxpayer services. Valdez also highlights challenges with technology modernization and privacy as employees transition back to the office. The recent leadership shake-ups, including changes at the top and the nomination of Billy Long for new IRS commissioner, add to the intrigue surrounding the agency's future.
The IRS faces significant staffing reductions of up to 50%, raising concerns about operational efficiency during the upcoming filing season.
Leadership instability within the IRS, marked by frequent changes and pending nominations, could impact the agency's strategic direction and governance.
Deep dives
Impact of Workforce Reductions at the IRS
Significant workforce reductions are underway at the IRS as the Trump administration aims to cut between 20 and 50 percent of its employees. The finalization of the Reduction in Force (RIF) plan by the Treasury is still pending, causing uncertainty among the employees, especially the 7,000 probationary workers on paid leave. Concerns have been raised about how these cuts will impact IRS operations, particularly in collections, as the termination of key enforcement personnel has already disrupted communication and efficiency. This disruption is expected to have a lasting effect, particularly after the filing season ends, complicating processes such as identity theft case handling that have already seen increased processing times in recent years.
Challenges Amid the Filing Season
Despite the upheaval, the IRS has managed to maintain a relatively normal filing season, processing over 60 million returns and issuing millions in refunds by early March. Measures have been taken to preserve essential staffing levels, with some employees exempted from termination to ensure continued operations during this critical time. However, discomfort has arisen due to a mandate that requires employees to return to the office, leading to privacy concerns in shared workspaces, especially for those handling sensitive taxpayer data. These ongoing challenges may still affect the efficiency of the IRS, warranting close watch as the filing season progresses and beyond.
Leadership Changes and Future Directions
The leadership at the IRS has experienced considerable instability following the departure of Commissioner Danny Werfel, with a series of acting commissioners stepping in amidst ongoing organizational shifts. High-profile changes, such as the replacement of the acting chief counsel, have raised alarms within the tax community regarding potential impacts on agency operations and governance. Additionally, former Missouri Representative Billy Long's nomination to lead the IRS is pending, highlighting a lack of clarity in leadership which could affect the agency's strategic direction moving forward. Concerns from past IRS officials emphasize the need for stable leadership to navigate the complexities of tax administration during this tumultuous period.
** This episode is sponsored by the University of California Irvine School of Law Graduate Tax Program. For more information, visit law.uci.edu/gradtax.
*** Credits Host: David D. Stewart Executive Producers: Jasper B. Smith, Paige Jones Producers: Jordan Parrish, Peyton Rhodes Audio Engineers: Jordan Parrish, Peyton Rhodes
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