IRS Plans Layoffs Amid Confusion Over 2025 Tax Season

As tax season begins, many Americans are advised to file their returns early to avoid identity theft and ensure quicker refunds, with the IRS set to process returns starting January 27. Concerns have arisen regarding potential delays due to job cuts at the IRS, as the Trump administration's downsizing plan may result in the loss of up to 7,000 employees, including those in collection and enforcement roles. Experts suggest that electronic filing and direct deposit can mitigate these issues, with refunds typically processed within 21 days when there are no complications. Additionally, the IRS is implementing modernization efforts, including virtual assistants and improved online account features, to enhance taxpayer experience. However, taxpayers must also be aware of new tax laws, such as changes in reporting thresholds for online sales, which have dropped from $20,000 to $5,000. With over 140 million returns expected, the IRS is working to maintain service levels despite the staffing challenges.