Recent executive orders from the new administration have introduced significant changes within federal agencies, and the Internal Revenue Service (IRS) is not excluded.

Recent directives, including a mandatory return-to-office (RTO) policy and a federal hiring freeze, have the potential to impact IRS operations during the current tax season, and the implications will likely be felt by tax providers and taxpayers alike.

Potential Implications for Taxpayers

Prior to this hiring freeze, the IRS presumably had already hired and trained seasonal tax staff to respond to taxpayers’ inquiries and return processing tasks. In addition, the IRS generally re-allocates staff from other areas as backlogs occur.  However with reduced staffing and operational shifts at the IRS, tax professionals may experience delays in some areas including receiving responses to inquiries, notices, and resolution requests.  The biggest impact on the hiring freeze will be felt post-tax season specifically for the IRS’ ability to hire enough agents to audit high-income earners, large corporations, and pass-through entities.

Our Advice

• Submit All Tax Documents as Soon as Requested. The earlier we receive your tax documents, the better we can ensure timely filing and avoid last-minute delays. If additional information or clarification is needed, quick responses can help us keep your tax return on track.
• Triple Check Documentation for Accuracy. Incomplete or incorrect tax documents can trigger additional IRS inquiries, which could take longer than usual to resolve. Review your records carefully before submission.
• Prepare for Extended IRS Response Times. If your past or current year tax return is flagged for review or if you receive a notice, resolution times may be longer than in previous years.

While we’ve yet to see the full impact of the IRS staffing changes, being proactive can help mitigate delays. The Wegner CPAs tax advisors are here to navigate these challenges on your behalf, and we’ll do our best to ensure your tax season runs as smoothly as possible.