Trump’s Hiring Freeze May Prolong Tax Refunds for Millions
President Donald Trump’s initiative to reduce the size of the federal government could result in delays for millions of American taxpayers awaiting their refunds.
On January 20, Trump implemented an executive order that freezes hiring across all federal agencies, including the IRS. This order also canceled job offers for new federal employees set to start after February 8. The timing of this action coincides with the annual tax filing period leading up to the April 15 deadline.
In preparation for the tax season, the IRS customarily increases its workforce in the fall and winter, hiring temporary employees to assist with processing returns and customer service. These seasonal workers represent around 11% of the IRS’s total workforce.
With a reduced number of employees handling tax returns, the disbursement of tax refunds is expected to face delays.
The authority to lift the hiring freeze lies with Treasury Secretary Scott Bessent. However, the Treasury Department has not provided any information on whether such action will be taken.
The IRS’s staffing issues were exacerbated by a January 28 memo from the White House that proposed paying remote federal employees through September 30 if they resigned by February 6. Nearly half of the IRS workforce operates remotely.
Subsequently, the White House mandated that IRS employees who accepted this offer must continue working through the tax season. Some who resigned early under the offer were instructed to return to work.
On February 10, a federal judge in Boston indefinitely extended the February 6 resignation deadline while legal challenges to the offer are being considered.
Homeland Security Secretary Kristi Noem has proposed further reducing IRS capacity by assigning IRS agents to assist with immigration enforcement. According to a February 7 memo, IRS criminal division agents could be utilized to audit businesses suspected of employing undocumented workers and to aid in the apprehension and deportation of migrants.
Noem’s plan could potentially decrease the number of IRS agents available to investigate tax-related crimes. The 2022 Inflation Reduction Act, signed into law by President Joe Biden, aimed to bolster IRS funding for combating fraud among affluent taxpayers. The nonpartisan Congressional Budget Office estimated that this could result in an additional $180 billion in revenue by 2032. House Republicans have been working to repeal these funding measures.
Potential delays in IRS operations could financially impact Americans. A 2023 survey by the Bipartisan Policy Center and Morning Consult revealed that 43% of adults depend on tax refunds for essential expenses such as food and housing.
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