IRS faces layoffs, warns of tax refund delays

The IRS is preparing for significant workforce reductions, potentially laying off up to 15,000 employees, which could lead to substantial delays in tax return processing during the peak of tax season. Experts warn that these layoffs, combined with a hiring freeze, may severely impact the agency's ability to process returns efficiently, causing longer wait times for refunds and assistance. Tax professionals advise taxpayers to file early to avoid the anticipated delays, which could stretch processing times for paper returns from the usual 6-8 weeks to potentially much longer. The IRS is already facing staffing challenges, being understaffed and struggling to retain employees, which exacerbates concerns about service levels. The looming cuts come as the agency expects to handle over 140 million tax returns this season, creating a ripple effect that could affect millions of Americans. Taxpayers may also face reduced access to free and low-cost filing assistance due to the anticipated layoffs.