What to Expect When You’re Expecting a Refund

The new Trump administration, led by Elon Musk and his Department of Government Efficiency, is moving fast and breaking things. We’re all getting a real-time lesson in Civics, and you may be wishing right now that you had paid more attention on that eighth-grade field trip to Washington!

So far, the DOGE crew’s biggest headlines surround the United States Agency for International Development, the Department of Education, and the Treasury’s bill-payment functions. But it was always inevitable they would train their eyes on the Internal Revenue Service. That’s happening literally now, sooner rather than later. So let’s take a high-level look at how today’s developments might affect the upcoming tax season and beyond.

First, a little table-setting. IRS funding has dropped like a stone in past years, simply because politicians don’t win elections by giving money to the least-popular agency in Washington. Audits have declined to just one out of two hundred returns, and actual humans answered just 29% of IRS phone calls in 2023.

In 2022, the Inflation Reduction Act authorized $80 billion in new IRS funding. The goal was to hire 87,000 new employees over the next decade, to replace retiring staff, improve customer service, modernize IT systems, and beef up enforcement. But opponents quickly howled in opposition. Social media was flooded with claims the money would go towards hiring 87,000 new gun-toting auditors to harass middle-income filers. Since then, Congress has clawed back $21.4 billion of that funding.

So, what’s happening at the IRS right now?

• Last month, the Office of Personnel Management blasted emails to 2.3 million federal employees offering a buyout if they agreed to resign by February 6. However, a week later, key IRS employees were told they couldn’t leave until May 15, after processing an expected 140 million tax return.

•        More recently, inside sources say the new administration is ready to lay off thousands of “probationary” workers (in their first two years of employment), as soon as this week.

•         The new Secretary of Homeland Security has requested help from the IRS’s criminal Investigation unit to investigate financial transactions associated with illegal immigration.

•        Finally, last week, DOGE showed up at the IRS offices on Constitution Avenue. One of Musk’s lieutenants will be assigned to the Service as a senior advisor to the acting commissioner. They’ll also have access to the highly sensitive Integrated Data Recovery System.
  

·       Nobody in or out of the agency has raised their hand to say, “Actually, we like our old technology.” No one thinks the Service is giving taxpayers the service they deserve. IRS headquarters are literally across the street from the Smithsonian, which is where those antique computers belong! But skeptics caution that moving too quickly could lead to processing delays and slower refunds, fewer audits of the rich, and tech overhauls gone wrong. They’re also concerned about safeguarding taxpayer privacy.

No Now we find ourselves playing a waiting game. Can DOGE cut IRS employment this fast without compromising the Service’s mission? Can an outsider with a tech background improve service for harried Americans who just want to get their refund checks? Magic Eight Ball says, “Reply hazy, try again!”

Years ago, Nationwide used the slogan, “Life comes at you fast!” to sell a ton of insurance. Today, life is coming at us fast, especially in DC. Unfortunately, Jake from State Farm, Flo from Progressive, the LIMU emu, and the Aflac duck are missing in action, with no insurance to be found. If DOGE’s efforts to streamline the IRS succeed, it will be hard to imagine anyone complaining. But you may want to fasten your seat belts to be ready for turbulence along the way. As always, we’ll be here to help you through it!