The departure of thousands of Internal Revenue Service (IRS) staffers over the past year has created a “major workforce challenge” that poses “severe risks” to IRS operations, the Government Accountability Office (GAO) said.
More than 17,000 employees – about 17 percent of the IRS workforce – resigned or retired early in 2025, including more than 5,100 workers who processed tax returns and provided customer service, GAO said in a report issued March 16.
The changes, part of the Trump administration’s efforts to reduce the federal workforce, came amid the firing of more than 7,300 probationary IRS employees in February 2025. IRS tried to reinstate those terminated workers in May 2025, but 60 percent of them did not return to the agency or left through the deferred resignation programs, GAO said.
Combined with tumult at the top – IRS had seven commissioners between January and August of 2025 – the changes have already slowed the processing of paper tax returns after the 2025 filing season since most staff left at the end of June, the report said.
Going forward, GAO revealed that an internal IRS report found that critical technology systems would not be ready for the start of the current filing season that began in late January. The IRS also identified “agencywide staffing gaps” which, combined with the need to implement tax law changes, pose “the main sources of risk to IRS’s ability to carry out a timely and successful filing season,” GAO said.
“As a result,” the report added, “IRS concluded return processing, customer service, and other functions would enter filing season undertrained or understaffed, which could lead to processing errors and poor customer service and ultimately harm taxpayers.”
Especially vulnerable is the IRS unit that oversees refundable tax credits and tries to prevent tax-related identify theft fraud, which GAO said is so depleted that junior staff are performing the job duties of senior staff that have left.
“IRS might be less prepared to identify and mitigate potentially fraudulent activities that could jeopardize taxpayers and IRS operations,” the report said.
GAO made three recommendations: that IRS implement a plan to address its backlog of more than 6 million pieces of correspondence with taxpayers, update its strategic workforce plan, and establish an implementation team to manage agency reform efforts.
The IRS neither agreed nor disagreed with the recommendations and told GAO it would consider them and provide additional details.
But IRS CEO Frank J. Bisignano defended the agency, emphasizing that GAO had also found that its tax return processing and customer service performance were similar to previous years.
“The 2025 filing season reached a successful conclusion, and we are now delivering the 2026 filing season, which started without delay on January 26, 2026,” he wrote in a letter to GAO included in the report. “Changes within the top ranks of leadership and to our organizational structure in 2025 presented opportunities to reassess goals and priorities that are improving our operational performance.”
Former IRS managers warned last year that the agency’s staff upheaval would put at risk its ability to issue timely refunds and answer taxpayer questions – along with threatening to reverse recent upgrades to some of the IRS’s antiquated technology. The upgrades had been made possible by an infusion of funds for the agency under the 2022 Inflation Reduction Act (IRA).
Though GAO concluded that the 2025 filing season was “mostly insulated” from these problems, the report emphasized that the IRS required filing season staff who accepted deferred resignation or early retirement to stay until after the season.
With many having left, the serious workforce challenges that resulted now threaten the IRS’s ability to do everything from implement tax law changes to “give taxpayers high-quality customer service,” GAO said.