Amid significant changes to federal hiring policies, President Donald Trump has declared a sweeping hiring freeze affecting the IRS indefinitely. This directive could influence how the agency manages the upcoming tax season.
The Independent reported that Trump's executive order puts an immediate halt to new hires at the IRS, casting uncertainty on tax processing times.
The executive order, issued late Monday, puts a 90-day freeze on recruitment across all federal agencies. However, the Internal Revenue Service (IRS) faces a unique condition with an indefinite freeze, which will only be lifted if deemed necessary for the national interest.
This decision is pivotal as tax season approaches, a period when the IRS traditionally increases its workforce to handle the surge in tax filings. Historically, the agency aims to issue refunds within 21 days to taxpayers who file electronically and opt for direct deposit.
Specialists in tax administration and government operations, including Dr. Steven Hamilton and Michael Cohn, have expressed concerns that the understaffing could delay these processes, impacting millions of Americans.
The executive order delineates that while most federal agencies are subject to a temporary 90-day hiring freeze, the IRS is excluded from this timeframe, remaining under a freeze without a specified end date. This clause allows the IRS's hiring restrictions to extend potentially beyond the three months assigned to other agencies.
Given the crucial role of the IRS in tax collection and enforcement, such an extended and indefinite hiring freeze is unprecedented. The agency, which ramps up its personnel annually to meet tax season demands, might struggle to maintain its efficiency due to these restrictions.
Experts argue that without the additional temporary staff, the IRS's ability to process returns, issue refunds promptly, and enforce tax laws effectively could be significantly impaired.
According to Dr. Steven Hamilton, an economist, "A hiring freeze on the IRS is like reducing enforcement on high-income individuals. If you don't hire the people who could audit their returns more intensively...then they get away with more tax evasion."
This statement highlights a potential reduction in tax compliance, particularly concerning higher-income earners who may be less likely to be audited due to staffing shortages.
While some, like Dr. Hamilton, suggest that the current resources acquired under Biden's Inflation Reduction Act may mitigate some negative effects, the overall impact could still be substantial. Hamilton remarked, "The IRS will function much better today and in the upcoming filing season with this hiring freeze than they would have, say, four years ago."
Alongside the hiring freeze, President Trump's executive order also announced the formation of the Department of Government Efficiency (DOGE), which will replace the U.S. Digital Service. This new department, integrated within the Executive Office of the President, aims to streamline government operations.
Elon Musk has been appointed as the leader of this newly established department. Initially, Vivek Ramaswamy was to co-lead before his departure to campaign for the governorship in Ohio.
This restructuring suggests a broader initiative by the Trump administration to overhaul federal operations, focusing on efficiency and responsiveness.
Michael Cohn and Max Stier, both experts in the field, also weighed in on the situation, voicing concerns about federal agency responsiveness to public needs due to the hiring freeze. Stier noted, "This order could leave agencies with hiring gaps in critical areas, and it will deter the talented workers needed for a well-functioning government, especially those with specialized skills."
These concerns reflect broader implications for the federal workforce and its ability to serve the American public, particularly in times of increased demand like the tax season.