Get ready for a tax season run by a much smaller IRS

• Americans are set to see higher tax refunds this year.
• However, staffing cuts at the IRS could lead to customer service delays and increased risk of errors.
• The IRS head previously said the agency is equipped to handle this year's tax filing season.

Average tax refunds this year are set to be nearly $750 higher than last year — but they might take a while getting to you, with a smaller IRS dedicated to getting them out.

The passage of President Donald Trump's "One Big Beautiful Bill" introduced new sweeping tax measures — which include no tax on overtime or tips and an expanded child tax credit — that will show up in many taxpayers' refunds this filing season.

The average tax refund is set to grow to $3,800 from the 2024 tax year's $3,052, according to the Tax Foundation. That's because the IRS hasn't directed employers to adjust how much they're withholding from workers' paychecks, meaning that the new tax provisions will show up instead in refunds.

There's just one problem: A much smaller IRS will be grinding away to get those checks to filers. The IRS's workforce shrank by 27% from January 2025 to December 2025, going from over 102,000 workers to around 74,000, according to National Taxpayer Advocate Erin Collins' annual report. Per that report, 22% of the agency's customer representatives left.

"The impact of these departures is not merely numeric," Collins' report said. "Many departing employees were experienced workers whose institutional knowledge and technical expertise cannot easily be replaced."

The agency experienced significant cuts at the hands of DOGE as part of the unofficial office's goal to slash the government workforce. Employees at the agency previously told Business Insider when those cuts were underway that Americans could experience strained customer service and challenges with tax refunds, and those issues likely won't go away this tax season.

"Over the last couple of years, there has been a lot of disruption associated with the agency," Garrett Watson, the director of policy analysis at the Tax Foundation, told Business Insider. Watson said the warnings from the National Taxpayer Advocate "showcase the risk the agency faces this tax season," alongside concerns from IRS workers over staffing reshuffles.

A current IRS employee said that while it's too soon to tell how tax filing services will be affected, they anticipate that limited staff will slow things down — especially after a report that IRS employees from different departments who are not tax experts could be brought in to help. The employee said that those workers would have to be trained on the filing process, and that takes time, which could translate to delays on the customer's end.

"This may lead to lower quality service for taxpayers who reach out and a higher risk of errors on returns processed or corrected by the agency, as agents with less experience may struggle to address more complicated tax matters," Watson said.

The potential strains come as filers no longer have access to the IRS's now-shuttered Direct File program, the agency's in-house pilot software that allowed taxpayers to file more seamlessly for free. That program had garnered high satisfaction ratings, though only a small sliver of taxpayers used it before the Trump administration pulled the plug.

It also comes after what Collins described as the "direct and lasting consequences" of the IRS's pandemic-era challenges, when the cash-strapped agency was tasked with delivering economic relief, processing refunds, and working through an abrupt transition into remote work — all of which led to a backlog in processing refunds and IRS offices piled high with paper.

The IRS and Treasury Department did not respond to a request for comment. In a press release marking the start of filing season, Treasury Secretary and acting IRS commissioner Scott Bessent said that "President Trump is committed to the taxpayers of this country and improving upon the successful tax filing season in 2025."

"Prior to the passage of the One, Big, Beautiful Bill, which delivered working families tax cuts, Treasury and IRS were diligently preparing to update forms and processes for the benefit of hardworking Americans, and I am confident in our ability to deliver results and drive growth for businesses and consumers alike," Bessent said.

"It's still early in filing season, and so far I'm not aware of any systemic problems. But there are vulnerabilities when you combine a rollout of new and technically complex provisions with staff reductions," Danny Werfel, who served as the IRS commissioner until January 2025, said. There are some "good signs" in his view — such as guidance on measures like tips, overtime, and vehicle-related credits already being issued.

"However, applying that guidance in real-world situations has historically led to more phone calls to the IRS," Werfel said. "For example, when verifying a vehicle meets US assembly requirements, the taxpayer or preparer may seek IRS phone support. So service quality on phone lines is where rubber will hit the road."