IRS navigates tax season amid staffing cuts

The Internal Revenue Service managed to get through the tax filing season last year despite extensive budget and staffing cuts, according to a new government report, but this year will be dealing with tax changes stemming from the tax law that was signed last summer.

The report, released Monday by the Government Accountability Office, noted that throughout 2025, thousands of IRS staffers resigned or retired early, and the agency had extensive leadership turnover during organizational changes, with seven commissioners and acting commissioners over the course of a year. The reported noted that major workforce challenges threaten the IRS's ability to give taxpayers high-quality customer service, reduce backlog of its taxpayer correspondence, address staff losses in its new workforce plans, and prepare technology systems for upcoming tax filing seasons

The GAO recommended the IRS develop a plan to address its workforce issues to help it effectively serve taxpayers in 2026 and beyond.

Despite the turmoil, the IRS's tax processing and customer service performance were similar to previous years. Even though the IRS didn't meet its 13-day goal for processing paper tax returns, it took fewer days to do so in 2025 than in 2024. 

The IRS also managed to answer approximately 9 million phone calls in both 2024 and 2025. The IRS's backlog of taxpayer correspondence remained above pre-pandemic levels at the end of the filing season and fiscal year 2025 as the agency continued to struggle with balancing the demands of phone service and correspondence. The IRS still doesn't have a plan to reduce the backlog, and without such a plan, the IRS risks not effectively reducing its backlog and may provide less timely service to taxpayers, the GAO warned.

Last year, the agency experienced large-scale changes to its workforce. The IRS adjusted its operations to comply with the new directives, including an order to return to in-person work. IRS data show that 17,047 employees — about 17% of the IRS's workforce as of January 2025 — left the IRS via deferred resignation and early retirement programs in 2025. That included 5,162 filing season staff in units that process returns and provide customer service. (Some previous reports have put the number around 25% to 27% of the workforce.) 

However, the 2025 filing season was mostly insulated from these changes, according to the report. The IRS required filing season staff who accepted deferred resignation or early retirement to stay until after the filing season. IRS officials told the GAO that that IRS is developing a new strategic workforce plan to align with the current administration's priorities, and its prior plans are on hold. If the IRS's new plan does not address its workforce challenges, the IRS will be unable to systematically identify future workforce needs and strategies for related goals, the GAO pointed out.

The IRS had vacancies and turnover in leadership roles throughout 2025, including having seven different commissioners and acting through August. Just last Friday, the IRS announced that Treasury Secretary Scott Bessent's temporary term as acting commissioner had expired, although he retains his oversight of the IRS as part of his functions running the Treasury Department. In the meantime, the IRS has the new position of CEO filled by Frank Bisignano, who is holding the job along with being the commissioner in charge of the Social Security Administration. Bisignano recently announced some other changes in the IRS leadership ranks in January as filing season got underway, prompting more uncertainty about the organization.

"IRS officials were uncertain about the status of some workforce changes like agency reorganization plans, and some modernization efforts for filing season functions have been in flux, such as activities to digitize paper documents," said the GAO report. "However, IRS lacks a team that is responsible for day-to-day management of agency reforms and ensuring quality information is shared across IRS. Without such an implementation team, IRS may struggle to ensure that reform efforts are successful and sustainable, which could in turn hinder IRS's ability to provide quality services to taxpayers."

The report noted that in December 2025, while implementing Public Law 119-21, commonly known as the One Big Beautiful Bill Act, an IRS internal report stated that critical technology systems would not be ready in time for the start of the 2026 filing season. It also stated that return processing and customer service functions would enter the season undertrained or understaffed, which could result in errors and poor service for taxpayers.

The GAO made three recommendations in the report to IRS officials to implement a plan to address its correspondence backlog, update its strategic workforce plan, and establish an implementation team to manage agency reform efforts. The IRS neither agreed nor disagreed with the recommendations, according to the GAO, and said it would provide additional details in its response to the final report.

"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," Bisignano wrote in response to the report. "During 2025, over 165 million individual income tax returns were received and processed, and more than 17 million telephone calls were answered by assistors, with approximately 8 million calls answered through automation."

He noted that the IRS made preparations for implementing the changes from the OBBBA for this tax season.

"As we are challenged each year to plan and prepare for the next filing season, we rely on institutional processes that guide our actions so that changes in personnel involved in the processes do not present insurmountable obstacles to achieving our goals," Bisignano added. "Similarly, 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 and the service we provide to the U.S. taxpayers."