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Meanwhile, the agency faced workforce cuts<\/a> from Elon Musk<\/a>‘s so-called Department of Government Efficiency, or DOGE, and other reductions in 2025. Those cuts included 17% to 19% of “key IRS functions”<\/a> for the filing season, according to a September report from the Treasury Inspector General for Tax Administration, or TIGTA, an independent federal agency.<\/p>\n Many critical filing season positions were exempt from the reductions in early to mid-2025. But the cuts could impact “key processing programs and customer service” going forward, the report found. <\/p>\n<\/div>\n The agency could also have a smaller budget<\/a> for the current fiscal year as Congress finalizes appropriations. A bipartisan agreement<\/a> released in January would provide $11.2 billion for the remainder of the 2026 fiscal year, which is roughly 9% lower than the 2025 IRS budget of $12.3 billion. <\/p>\n A separate TIGTA report<\/a> from October said, “completing IT modernization projects, providing quality service to taxpayers and enforcing tax laws with a reduced workforce and budget will be challenging for the IRS.” <\/p>\n Amid recent staffing reductions, “taxpayers may have to increasingly rely on IRS self-service tools,” according to the report. However, the number of IRS online account<\/a> users continues to grow, exceeding 51 million in 2025, up by 12 million from 2024.<\/p>\n<\/div>\n One of the “biggest challenges” for the IRS will be implementing Trump’s tax law changes, particularly the deductions for tips, overtime and auto loan interest, according to Holtzblatt.\u00a0<\/p>\n While the U.S. Department of the Treasury has spent several months updating guidance<\/a>, “the law is complicated,” she said. For the tips and overtime deductions, waived reporting requirements for employers adds “an additional burden for taxpayers,” she said.\u00a0 <\/p>\n Treasury Secretary and acting IRS Commissioner Scott Bessent in early January said in a statement<\/a> that the agency was “diligently preparing to update forms and processes” before the passage of Trump’s legislation.\u00a0<\/p>\n<\/div>\n Another issue policy experts will be watching is how quickly filers receive refunds this season.<\/p>\n Taxpayers could see bigger refunds in 2026<\/a> due to Trump’s changes enacted in 2025. Without paycheck withholding updates<\/a>, many could see the benefit when filing returns in 2026. In 2025, the average refund <\/a>for individual filers was $3,052 through Oct. 17, according to IRS data.<\/p>\n Taxpayers with an accurate, e-filed return should get their refunds “in a timely fashion,” Holtzblatt said. But it could take longer for paper-filed returns or filings “flagged in processing” for mistakes.\u00a0Generally, e-filed individual tax returns are processed within 21 days<\/a>, according to the IRS.<\/p>\n But new deductions create more opportunities for math errors, which could cause the IRS to flag returns and delay refunds, she said. <\/p>\n<\/div>\nWhat IRS budget cuts mean for taxpayers<\/h2>\n
How Trump’s tax cuts could impact filers <\/h2>\n
When taxpayers could receive refunds<\/h2>\n