IRS Layoffs Amid Trump's Federal Workforce Reduction Could Delay 2025 Tax Refund Schedule

The Internal Revenue Service (IRS) began accepting 2024 income tax returns on 27th January. Taxpayers have until 15th April 2025 to file their 2024 returns via mail, online, or with the help of a tax preparer.

Many taxpayers depend on tax refunds to make ends meet, and they attribute their financial situation to high inflation, depleted savings, or mounting debt. It is estimated that, on average, three out of four tax filers can expect to receive a refund from the IRS. The speed of tax refunds depends on several factors, like the mode of filing, information accuracy, and the processing time of the taxpayer's bank to make the funds available to the account holder.

If you file taxes electronically and select the direct deposit option, the IRS states that tax refunds are generally credited within 21 days from the date of filing. However, tax refunds for paper returns could take as long as eight weeks from the date the IRS receives the forms. Remember that you can also receive tax refunds in multiple ways, including a paper cheque from the IRS or have them deposited in traditional or Roth Individual retirement accounts.

How To Check Income Tax Refund Status?

The IRS has developed a simple tool called "Where's My Refund" on the IRS website for taxpayers to track their refund status by entering basic details like Social Security Number (SSN) or Individual Taxpayer ID Number (ITIN), the appropriate tax year and filing status, and the exact whole dollar refund amount on returns.

This way, filers can see if their refunds are processed, approved, or disbursed to their bank accounts. The IRS stated that it could take at least 24 hours after e-filing or four weeks in case of a paper return before a refund status shows up on the tracking tool.

Could Trump-led Layoffs Delay IRS Tax Refunds?

As Elon Musk's Department of Government Efficiency (DOGE) works to meet its annual federal spending reduction goal of £1.58 trillion by downsizing US agencies, President Donald Trump has reportedly ordered the termination of close to 16,000 recently hired IRS employees in the next few days.

The IRS workforce grew to almost 100,000 under President Joe Biden. Based on these numbers, over 15% of the workforce could lose their jobs. The IRS employees facing termination included lower-level positions like taxpayer response, junior audit roles, and phone centres.

Recently, US Office of Personnel Management officials ordered all agencies to dismiss nearly all probationary employees who have yet to gain civil service employment protection.

If these IRS job cuts are implemented, they will happen right in the middle of tax season, and it remains unclear to what extent these layoffs will squeeze resources or impact the average tax refund processing times. Another source said these layoffs would be made regardless of how they affect the agency's operations.