Internal Revenue Service (IRS)
The workers being laid off are mostly probationary employees who have been with the IRS for one to two years, and have fewer protections. AFP

As part of ongoing federal budget cuts under the Trump administration, the U.S. Internal Revenue Service (IRS) will begin laying off around 6,700 employees starting Thursday, right in the middle of tax season.

The timing of these layoffs raises concerns, as the agency faces high demand during the tax season.

The workers being laid off are mostly probationary employees who have been with the IRS for one to two years, and have fewer protections. The layoffs will affect staff in roles such as revenue agents, auditors, and IT specialists, Reuters reported.

The IRS employs around 100,000 people in total, and the layoffs will hit several states, including New York, California, Georgia, and Tennessee.

This move is part of a broader trend, with several other federal agencies, including the National Park Service, Consumer Financial Protection Bureau, Department of Health, Human Services, Department of Education, and USAID, also seeing cuts in their workforce, reported USA Today.

Last week, the Office of Personnel Management ordered all federal agencies to dismiss probationary workers, affecting the IRS as well.

Former IRS Commissioner Charles Rettig notes that the layoffs will reduce work opportunities for military personnel and their spouses, as nearly 10% of current IRS employees, including probationary hires, are veterans, with many others being military spouses.

Challenges For IRS During Tax Season

Despite the staff shortages, the IRS has tried to minimize the impact during the tax filing season. It plans to keep around 6,600 probationary employees on staff to help with the tax season, particularly those in customer service and taxpayer advocacy.

However, some senior executives within the IRS worry that these cuts could delay processing tax returns and refunds.

What Does This Mean For Taxpayers?

The IRS is already struggling with staffing issues, which could make it harder for taxpayers to get help or receive their refunds quickly. With the reduction in IRS staff, tax accountants are urging taxpayers to file early to avoid delays.

Important Dates For 2025 Tax Season

Tax Deadline: The deadline to file taxes is April 15, 2025. This date is fixed unless it falls on a weekend or holiday, but this year it lands on a Tuesday.

Extension Deadline: If you need more time to file, you can request an extension by April 15. This will give you until October 15 to submit your tax return without penalties. However, the extension only gives you more time to file returns, not to pay taxes owed.

Requesting an extension is simple and free. You can do it electronically or by mailing a paper form (4868). You will need to provide basic details like your name, address, Social Security number, and any payment you owe.

An automatic extension is granted to those impacted by natural disasters.

Penalty: If you miss the deadline, the penalty is 5% of the tax due per month, up to 25%. A smaller 0.5% penalty applies if you file late but don't pay your taxes, or if you get an extension but fail to pay.

Check Your Tax Refund Status Online

To check your tax refund status, use the IRS "Where's my refund?" tool, available online or through the IRS2Go app. Log in and check daily for updates. The status will update once a day overnight and may show one of three statuses:

Return Received – The IRS is processing your return.
Refund Approved – The IRS approved your refund and will send it by the displayed date.
Refund Sent – The IRS has sent your refund, which may take up to 5 days for direct deposit or weeks for a check to reach by mail.