Overview

• IRS workforce fell by 26 percent to 75,702 employees in the first half of 2025, shedding over 2,000 information technology positions.
• The agency processed 98 percent of returns on time during the 2025 season, ending with 3.8 million unprocessed filings.
• President Trump’s budget proposal calls for a 20 percent cut in IRS funding next year, reversing supplemental resources from the Inflation Reduction Act.
• Potential tax law changes, including retroactive provisions in the One Big Beautiful Bill Act, could force the IRS to overhaul forms and systems ahead of the 2026 season.
• Identity theft case backlogs persist, with almost 387,000 unresolved claims taking up to 20 months to address.