Yes, the IRS is understaffed. After briefly climbing above 102,000 employees in January 2025, the agency’s workforce dropped to roughly 74,000 by December of that year, a loss of about 28,000 people in a single year through layoffs, a hiring freeze, separation of temporary staff, and attrition.1Internal Revenue Service. National Taxpayer Advocate Delivers Annual Report to Congress That is well below the agency’s 1991 peak of about 119,000 full-time equivalent positions and below where staffing sat before the Inflation Reduction Act funded a hiring push.2Internal Revenue Service. IRS Budget and Workforce For the average taxpayer, that translates into longer waits for help, slower refunds on paper and amended returns, and enforcement attention concentrated on the highest earners.
How the IRS Got This Small
The staffing decline is a long story with a sharp recent turn. From the 1991 peak near 119,000 FTEs, the workforce slid below 100,000 by the early 2000s and settled around 77,000 to 80,000 through the mid-2010s.2Internal Revenue Service. IRS Budget and Workforce
The Inflation Reduction Act of 2022 was designed to reverse that trend. It authorized roughly $80 billion in supplemental funding over ten years, giving the IRS budgetary certainty to hire and train new staff. FTEs rose to about 90,500 in fiscal year 2024 and topped 102,000 in early 2025.2Internal Revenue Service. IRS Budget and Workforce
Congress began pulling that money back almost immediately. The Fiscal Responsibility Act of 2023 rescinded $1.4 billion, and the March 2024 omnibus appropriations package cut another $20.2 billion. Roughly $21.4 billion of the original $80 billion was rescinded through legislation, and the enforcement allocation absorbed the largest share of the losses. Then came the 2025 federal workforce reduction, which erased the IRA hiring gains outright.
Demographics amplify the problem. A 2022 internal estimate found that about 52,000 employees, roughly 63 percent of the workforce at the time, would become retirement-eligible within six years.3Taxpayer Advocate Service. 2022 Annual Report to Congress – Recruitment Many of those retirements have since occurred, and departing revenue agents and criminal investigators took decades of institutional knowledge with them.
What It Means When You Call the IRS
Phone service is the most visible symptom of IRS staffing levels, and it swings hard with headcount. In fiscal year 2021, the agency received a record 282 million calls but answered only about 32 million of them, an 11 percent Level of Service, with fewer than 15,000 employees available to pick up.4Taxpayer Advocate Service. NTA Blog: Frustration over Lack of Adequate Phone Service
IRA hiring changed that. By the 2024 filing season, the IRS reported an 88 percent Level of Service on its main accounts management lines with average wait times around three minutes. That performance depended on a workforce that has since shrunk by roughly a third. The National Taxpayer Advocate’s most recent annual report described service in 2025 as strong but warned of challenges for taxpayers who run into problems in 2026.1Internal Revenue Service. National Taxpayer Advocate Delivers Annual Report to Congress
In-person help is also thinner. The IRS operates about 363 Taxpayer Assistance Centers nationwide, and in 2025 announced plans to close nine locations across six states. The closures push more volume back onto the phone lines and hit rural filers and elderly taxpayers hardest.
What It Means for Paper and Amended Returns
Every paper Form 1040 and every amended Form 1040-X requires a human to open the envelope, key in the data, and route it. When processing staff shrink, these returns pile up.
Fiscal year 2025 numbers tell the story:
- Paper filers waited an average of 14 weeks for refunds.
- Individual amended returns took more than five months on average to process.
- Business amended returns averaged over 13 months.
The IRS processed about 3.7 million individual amended returns and 1.6 million business amended returns during FY 2025.1Internal Revenue Service. National Taxpayer Advocate Delivers Annual Report to Congress
If the IRS holds your refund beyond the statutory 45-day window after your return is filed, it owes you interest. That rate is 7 percent annually for individual overpayments as of the first quarter of 2026, compounded daily.5Internal Revenue Service. Quarterly Interest Rates
If a delayed refund is causing genuine financial hardship, such as an inability to pay for housing, food, utilities, or transportation to work, you can request expedited help from the Taxpayer Advocate Service by filing Form 911.6Taxpayer Advocate Service. Submit a Request for Assistance
What It Means for Your Audit Risk
Fewer auditors have quietly reshaped who gets examined. The overall individual audit rate fell to about 0.3 percent on 2018 returns and has not meaningfully recovered. For filers with income below $500,000, the chance of an audit is very small, and the IRS has stated that households earning under $400,000 will not see audit rates rise above historical norms.
At the top of the income scale, the picture is different. The agency has targeted a roughly 16.5 percent audit coverage rate for taxpayers with total positive income above $10 million by tax year 2026, up from about 11 percent on 2019 returns. Large corporations with more than $250 million in assets face plans to triple their audit frequency. Whether the agency can hit those targets with a smaller staff is an open question, since enforcement funding took the deepest cuts in the IRA rescissions.
Why the Hardest Roles Take Years to Rebuild
The compliance and enforcement divisions are where understaffing bites deepest, because these positions are hard to fill quickly. Revenue agents who conduct complex audits have historically needed at least 24 semester hours of accounting coursework and often hold CPA licenses.7Internal Revenue Service. IRM 6.338.1 Qualification Requirements Estate tax attorneys need a law degree, with senior positions requiring additional legal experience or an LL.M.
Criminal Investigation special agents have an even steeper path. They are sworn federal law enforcement officers who carry firearms, execute search warrants, and make arrests, and CI is the only federal unit with investigative jurisdiction over Internal Revenue Code violations.8Internal Revenue Service. About Criminal Investigation
Entry-level federal salaries for revenue agents sit well below what experienced CPAs earn in the private market, which makes it difficult to attract the mid-career forensic accountants the agency needs most. Replacing a senior revenue agent or criminal investigator takes years of recruiting, credentialing, and on-the-job training, and there is no way to fast-track it.
Where Technology Helps, and Where It Doesn’t
The IRS has leaned on technology to stretch a smaller workforce, with mixed results. Direct File, the agency’s free online filing tool, launched as a pilot in 12 states for the 2024 filing season and expanded to 25 states for tax year 2024, with nearly 300,000 taxpayers using it. The program has since been closed, with the Treasury Secretary citing a preference for private-sector alternatives. That removes one tool that could have kept paper returns off processing clerks’ desks. The IRS still maintains Free File through partnerships with commercial software providers, but adoption has historically been low relative to the number of eligible filers.
On the enforcement side, artificial intelligence is filling part of the gap. In late 2023, the agency opened audits of 75 partnerships holding more than $10 billion in assets each, with machine-learning models choosing both the targets and the specific issues to examine. It also sent compliance alerts to 500 large partnerships flagging balance-sheet discrepancies. AI can identify suspicious returns human reviewers would never reach, but AI picks targets; trained revenue agents still conduct the audits. A smaller workforce using better tools can be more efficient per employee, but efficiency has limits when headcount drops by roughly a third in a single year.