The 2025 tax season has just begun, and there is already drama. We’re talking about the type of plot twist that even Netflix wouldn’t approve. Former President Donald Trump and his latest sidekick.
Elon Musk (yes, that Elon), have decided to drop a bombshell: they will cut 6,000 federal jobs, including a large number at the Internal Revenue Service. Why? All in the name of “government efficiency,” courtesy of Musk’s newly established DOGE (Department of Government Efficiency).
This is where things get spicy. These layoffs aren’t just about cutting the fat. They’re focusing on IRS newcomers—people on probation, many of whom were hired with funds from Biden’s 2022 Inflation Reduction Act.
Translation: As millions of Americans scramble to file taxes by April 15th, the agency’s already overburdened workforce is about to become even leaner.
Tax Refunds vs. Credits: What’s the Deal?
Experts are extremely skeptical of this move. Why? Because fewer IRS workers mean slower processing times, which means you’ll have to wait longer for your sweet, sweet refund. And let’s be honest: nobody enjoys waiting for money that is already theirs. Let’s take a step back before we get too stressed. What exactly are tax refunds and credits? I’m glad you asked.
- Tax Refunds: Think of this as the government’s IOU to you. If you overpaid taxes during the year (thanks, withholding!), Uncle Sam cuts you a check (or, more likely, direct deposits it). It’s like finding cash in your winter coat—except you earned this cash.
- Tax Credits: These are the VIPs of tax breaks. They directly reduce your tax bill, dollar for dollar. We’re talking gems like the Child Tax Credit (cha-ching for parents), the Earned Income Tax Credit (help for low-to-moderate earners), and even credits for going green with solar panels. Pro tip: Credits > deductions. Always.
But here’s the catch: To snag these goodies, you gotta file accurately. One typo, and the IRS might hit pause on your refund to ask questions. And with fewer staffers to answer those questions? Yikes.
Why This Affects YOU (Even If You’re Not a Tax Pro)
The Internal Revenue Service is losing thousands of employees in the middle of tax season. These aren’t just paper pushers; they’re the ones who answer your panicked calls, correct errors, and issue refunds. Consider a Walmart on Black Friday, but with half the cashiers. That is the IRS right now.
Worst case scenario? There are numerous delays. The IRS typically processes e-filed returns within 21 days, but if your filing contains a hiccup (such as missing information or a math error), you may be stuck in limbo. With fewer employees, “21 days” may become more like 21 business days in another dimension.
But there is hope: tax experts say you can avoid the chaos by filing early, electronically, and double-checking your forms. Consider arriving at a concert early to avoid the long lines. The better organized you are, the less you will have to rely on the IRS’s skeleton crew.
The Backstory: Why the IRS Is in Hot Water
Let us return to 2022. Biden’s Inflation Reduction Act pumped $80 billion into the IRS to modernize systems, hire employees, and crack down on tax evaders.
Fast forward to 2025, and that funding is no longer guaranteed. Republicans have pushed for these cuts, claiming the IRS is overfunded and overreaching. Enter Trump and Musk’s DOGE, wielding the axe.
What was the result? The National Treasury Employees Union filed a lawsuit alleging foul play in the layoffs. Meanwhile, Democrats are raising red flags, warning about a “refund disaster.” It’s a political dumpster fire, with taxpayers caught in the crossfire.
