IRS Workforce Cuts Threaten 2026 Tax Season Efficiency

The Internal Revenue Service (IRS) faces significant challenges ahead of the 2026 tax filing season due to a workforce reduction of over 25 percent, dropping from 102,113 to 75,702 employees, alongside potential budget cuts totaling up to 37 percent when accounting for revoked supplemental funds. These reductions come as the IRS must adapt quickly to new tax law changes, including provisions retroactively applying to the 2025 tax year, which could complicate processing and refunds for millions of taxpayers. Additionally, the IRS has closed the window for claiming the $1,400 pandemic stimulus check, with a final deadline of June 16, 2025, after which unclaimed funds cannot be recovered. Meanwhile, the government announced a $500 IRS tax refund to be issued in June 2025 for taxpayers who filed 2024 returns on time, with eligibility depending on income and credits claimed. Tax professionals advise Americans to conduct mid-year tax check-ins to avoid surprises in the upcoming tax season and better manage tax outcomes. Legal rulings from the Bombay High Court unrelated to the IRS tax filing and refund issues were also reported but are not directly relevant to the U.S. tax context.