IRS Job Cuts: Do You Still Have to Pay Your Taxes?

It’s tax season, but you wouldn’t know that by the tone of recent headlines about the IRS.

So far this year, more than 12,000 IRS employees have been laid off or agreed to resign, and tens of thousands more could be let go soon.

What does that mean for you as a taxpayer? According to some social media influencers, the downsizing at the IRS is a green light to skip paying taxes.

But don’t take their word for it! Just because the IRS has been downsized, doesn’t mean the rules around filing your taxes have changed.

Recent Changes at the IRS

Things were looking up for the IRS in 2024. The total number of employees at the agency climbed to over 100,000 for the first time since 1997 and agents were recovering billions more in taxes, thanks to new initiatives funded by the Inflation Reduction Act (IRA).

According to the IRS website, the new funding allowed the agency to “launch more digital tools in the last two years than the previous 20 years.” Here are some ways the funds were put to use:

• Modernizing the agency’s “65-year old foundational technology.”
• Replacing some of the agency’s rapidly-aging workforce, 63% of whom were eligible to retire by 2029.
• Opening or reopening more than 50 taxpayer assistance centers across the U.S.

But things took a hard right turn in 2025. In January, President Donald Trump said he wanted to terminate the agency’s entire workforce or send employees to work at the border. What does he propose will take the place of the dismantled IRS? An External Revenue Service that he says will replace tax revenue with money raised through tariffs.

More than  7,000 IRS staff-members have been laid off, the majority of whom were auditors and collection staff. Another 5,000 have agreed to a leave through a “deferred resignation” plan that will keep them on payroll (while not actually reporting to work) through September.

Here’s a look at the other important events involving the agency since the beginning of this year:

• The new Homeland Security Secretary asked to borrow workers from the IRS’s Criminal Investigation Unit to help with immigration enforcement.
• The union that represents IRS workers asked a judge to put a stop to the IRS job cuts.
• The U.S. General Services Administration outlined a plan to close at least 110 of the roughly 360 taxpayer assistance centers.
• A 25-year-old DOGE software engineer was granted read-only access to “anonymized” IRS data systems that have Social Security numbers and bank information on nearly every person in the U.S.
• Several news outlets report that the IRS is preparing to cut its 100,000-person workforce in half.

Impact on Taxpayers

The IRS is still more well-staffed than it has been in recent years. Nonetheless, taxpayers could end up feeling the impact of the ongoing cuts this tax season. Lower staff numbers at the agency could lead to any and all of the following outcomes:

• Longer wait times to speak to IRS support agents by phone.
• Less in-person support available at taxpayer assistance centers.
• Delays in processing returns and receiving refunds.
• More processing errors.
• Delays in audits.
• More cases of undetected identity theft and tax fraud.
• Fewer audits of corporations and high-net-worth Americans.

Of course, this also means the IRS could end up bringing in far less tax revenue for the 2024 tax year, leading to even bigger budget deficits. In past years, the agency was already collecting about $700 billion less than it was owed annually.

Four Social Media Rumors About the IRS: Are They True or False?

When it comes to what you see on social media, it’s good to be a skeptic. According to the IRS, social media advice can mislead people about tax basics, such as the credits they’re eligible for. It can even encourage viewers to unknowingly commit tax crimes. So let us set the record straight on what to expect this year…

Rumor 1: You Don’t Have to File Taxes

Just because the IRS has fewer employees doesn’t mean you’re off the hook for filing taxes. In fact, only Congress has the power to change your tax obligations.

Regardless of the recent changes at the IRS, here’s what could happen if you fail to pay your taxes:

• Interest charges: You can be charged compounding interest on the taxes you owe starting from the filing deadline until you pay the full amount.
• Failure-to-pay penalty: You can be charged a monthly penalty of one-half of one percent on what you owe, up to 25% of the overdue amount.
• Levies and offsets: The IRS can intercept your bank account (a levy) or withhold your future tax refunds (an offset) to pay you overdue taxes.

If you need help filing, the IRS still has free support. It may have fewer staff members, but here are some of the tools and resources you can try:

• Direct File: This new tool lets you file your federal taxes online for free, directly with the IRS. Direct File is currently available in 25 states but there are some restrictions on who qualifies to use it.
• IRS Free File: People who earn up to $84,000 Adjusted Gross Income (AGI) can use IRS Free File to prepare and file their federal (and in some cases state) taxes online.
• Tax prep services: In-person tax preparation services are still free for people 60 and older and for those with limited income, through the IRS’s VITA and TCE programs. Check to see if there’s a VITA or TCE site near you.

Rumor 2: Everyone should file an extension

Some TikTokers have advised that everyone file a tax extension. Their thinking is that the IRS will be completely dismantled before your extension expires in October, therefore you won’t have to pay any taxes for the 2024 tax year.

But there’s no evidence the agency will be dismantled that soon. In fact, it’s a good idea to file early this year. Here’s how you can benefit from filing early:

• Reduce your chances of being targeted by tax fraud.
• Give yourself more time to get customer support from the IRS if needed.
• Speed up an already delayed timeline to get your refund (if you’re due one).

Rumor 3: It will be harder to get customer support

Many news sources have suggested it will be harder to get IRS customer support this year, and their claim likely is true.

In fact, an unknown number of the employees who were let go were answering phones in the Taxpayer Services Department. That department is responsible for helping taxpayers with the following:

• Providing information on the status of returns
• Speeding up refunds
• Responding to tax questions submitted by calls and email

We called an IRS helpline in early March to see if live support was available, and were quoted a 20-minute wait time to speak to a representative.

If you’re seeking guidance on tax preparation and filing, and you don’t want to deal with delays, try starting with the IRS’s Interactive Tax Assistant search tool, which directs you to IRS web pages that answer basic tax questions.

Rumor 4: It’s okay to fudge on your taxes

With all the recent changes, you might be tempted to get creative when preparing your taxes this year.

Sure, the IRS might be less likely to catch errors and outright lies on your tax forms now that they’ve lost some staff, but there’s still a chance you could get caught.

In recent years, the IRS has identified everything from international tax schemes to multi-level marketing scams and more, not to mention scads of individuals who simply entered incorrect figures to boost their tax returns.

To be clear, when you intentionally enter incorrect information on your tax forms you’re committing tax fraud. Between 2019 to 2023, 63.6% of people who committed tax fraud were sentenced to prison, and their average sentence was 16 months, although in some cases sentences can be decades long.

In other words, the punishment for tax fraud far outweighs any potential benefit.