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Tax season this year went…surprisingly well, all things considered. Even though the IRS lost thousands of personnel and went through a revolving door of commissioners, 2025 still had “one of the most successful filing seasons in recent memory,” National Taxpayer Advocate Erin M. Collins wrote in her recent midyear report to Congress. The IRS processed more than 98% of individual tax returns, and achieved an 87% Level of Service on its phone lines, up from 63% last season. Heck, even CPAs said things went well overall.
So the agency’s out of the woods, right?
Not exactly. The IRS stands to lose around 26% of its workforce this year, Collins wrote, going from around 102,000 employees to less than 76,000. The full impact of the job cuts has yet to be felt, as many departing employees took deferred resignations and won’t leave until September. And the IRS is set to lose around 20% of its appropriated funding from Congress, which, coupled with decreased IRA funding, means a 37% budget cut altogether, Collins wrote.
On top of this, the new budget bill just passed—and the IRS typically receives a higher volume of calls in years with tax law changes.
Collins recommends the IRS hire “essential filing season employees” such as customer service representatives and processing personnel by the end of this summer so they can be trained in time for busy season ’26. “Especially in the short term,” she wrote, “the number of total IRS employees is less important than the number of trained employees.”
IRS tech is far out, man: The IRS could also really, really use more money to upgrade its technology, Collins wrote in her report. Some of the agency’s systems date back to the 1960s (yes, the Woodstock era). It has “about 60” different case management systems, which aren’t integrated with each other, Collins wrote. Staff answering calls “may have to put the taxpayer on hold multiple times to launch different systems,” she observed.
The IRS does have nine modernization projects in the works, Collins noted, but since the agency lost around 27% of its IT personnel this year, those improvements may be slow to arrive.