In response to the Trump Administration’s Order to eliminate Probationary Workers from all Federal Agencies, the IRS will lay off thousands of new employees in the middle of tax season. It’s unclear how many employees will be affected.
Those layoffs could begin as early as this week.
This comes on the heels of the other administration plan offering early buyouts to all Federal Employees. The so-called “Deferred Resignation Program” allowed employees to leave their position and to continue receiving a paycheck until September 30th of this year.
But the IRS has required all of their employees to not accept the buyout until after tax season. No one knows how many of their employees will opt for this plan.
But a couple of things are certain. Given the types of new hires that will be furloughed…
1 – Return processing times are going to lengthen.
2- The time spent on hold when calling the Service will also increase.
Enforcement actions will probably not be affected until after the season when IRS Employees are allowed to accept the buyout. Probationary Employees don’t have the training necessary to handle audits.
It should be noted that whenever you have a problem with the IRS, making a telephone call is the last resort. The agents answering their phones are generally the least experienced people in the agency, only know what the computer tells them, and can rarely affect any type of change even if they knew what to do in the first place.
If you need something done, you write a letter. The problem is that the responses to those letters will now take even more time.
Be patient. Sooner or later someone at the Service will handle your request.
Let me leave you with this…
The Department of Government Efficiency (DOGE) has requested access to taxpayer files at the IRS. The system in question, known as the Integrated Data Retrieval System (IDRS), is used by the Service to review income tax returns and update taxpayer information.
As of last week, the IRS hadn’t granted DOGE access to the system. It’s being reported that there are two major reasons that they are requesting access…
Follow The Money
Elon Musk said, “We do find it rather odd that there are quite a few people in the bureaucracy who have ostensibly a salary of a few hundred thousand dollars but somehow manage to accrue tens of millions of dollars in net worth while they are in that position. We’re just curious as to where it came from,”
Haven’t you ever wondered how that happens? How does a lowly paid Civil Servant go to Washington for a few terms, and go home a multi-millionaire?
We might just find out.
The Earned Income Tax Credit
Elon Musk also singled out the EITC, citing a report from the Economic Policy Innovation Center that referenced figures provided by the Office of Management and Budget, indicating that approximately $15.9 billion worth of EITC payments were improper in fiscal 2024.
“This is why we’re doing what we’re doing . . . this is all bad stuff,” President Trump said.
The EITC, which is aimed at lower-income households, has been fraught with challenges in recent years. A March 2024 report by the Government Accountability Office found that nearly 34% of all EITC payments issued in fiscal 2023 were improper. Tax policy observers have criticized the IRS’s alleged focus on minority groups for EITC audits.
Anyone like me who’s ever done off-the-street 1040’s could tell them about the abuses in this area. That’s why I stopped doing them thirty years ago.
This could get interesting. I can’t even imagine the fallout that would happen if this leads to the end of the EITC.
How would H&R Block and Jackson Hewitt possibly survive?
We’re all going to get through this. Let’s get through it together.
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Chris Amundson
President
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