Recent changes at the Internal Revenue Service (IRS) have altered its operational capacity. As part of the Trump Administration restructuring effort, the IRS has experienced significant staff reductions, including the termination of over 7,000 employees. These layoffs, which began on February 20, 2025, targeted primarily probationary employees—those with less than one year of service—who were concentrated in offices across states such as Texas, New York, Georgia, Florida, Tennessee, and Pennsylvania. Approximately 5,000 of these employees worked in the enforcement and collections section, a division responsible for auditing high-income taxpayers and large corporations. The IRS workforce, which stood at roughly 90,000 employees before the layoffs, has been reduced by about 6-7% as a result.
Among those affected was a team examining a company with annual earnings of approximately $3 billion, a case that was interrupted when five of the nine team members were laid off. The reduction in personnel has impacted the IRS’s ability to conduct timely audits, particularly for major corporations and high-income individuals. In fiscal year 2023, the IRS closed 582,944 tax return audits, recommending $31.9 billion in additional tax, with a focus on high-wealth non-filers and underreported income. The current staffing cuts may limit similar efforts moving forward.
Photo by Saad Alfozan on Unsplash
The layoffs coincide with the 2025 tax filing season, during which the IRS anticipates processing over 140 million tax returns by the April 15 deadline. Historically, the IRS remains busy beyond this date, handling refunds and late filings through the summer. The staff reductions have led to delays in enforcement actions and slower communication with taxpayers. This may result in longer wait times for responses, reduced access to resources, and increased uncertainty when interacting with the IRS. Prior to the layoffs, the IRS had taxpayer services answering over a million more calls in 2024 compared to the previous year and maintaining an average wait time of just over three minutes, while assisting 780,000 taxpayers in person at Taxpayer Assistance Centers—a 37% increase from 2023.
Additional changes at the IRS include a hiring freeze implemented in January 2025 and plans to potentially reduce the workforce by up to 50% through further layoffs, attrition, and buyouts. The IRS has also closed over 120 offices, including some Taxpayer Assistance Centers, as part of broader efficiency measures. Concurrently, the IRS is increasing its reliance on automation and technology, influenced by initiatives tied to the Department of Government Efficiency, established to reduce federal spending. These technological updates affect filing systems, ID verification processes, and payment structures, altering how taxpayers and professionals interact with the IRS.
In response to these developments, Durfee Law Group has outlined its approach to assist clients during this period of change:
1. Client Support
Durfee Law Group provides clients with information about the IRS staff changes and their potential effects. The firm assists in preparing for audits or inquiries, aiming to minimize uncertainty and equip clients to handle tax-related matters. This involves reviewing client records, advising on documentation, and developing strategies tailored to the current audit environment, which has seen a shift away from large-scale enforcement actions.
2. Communication with the IRS
The firm utilizes its knowledge of tax law and established connections with tax authorities to manage IRS interactions for clients. This includes maintaining compliance with current regulations and addressing any errors that may arise during the IRS’s restructuring. The firm handles correspondence, filings, and inquiries on behalf of clients, adapting to delays or shifts in IRS response times.
3. Adapting to Technology Updates
With the IRS increasing its use of automation, we advise clients on navigating these updates, including changes to filing systems, ID verification, and payment processes, to maintain compliance and improve efficiency. The firm offers guidance on using updated IRS online tools, such as the Where’s My Refund? tracker, which saw over 303 million inquiries in fiscal year 2023, and the Business Tax Account, recently expanded to include sole proprietors with employer identification numbers.
The IRS’s transformation extends beyond staffing, with leadership transitions also underway. The resignation of Commissioner Daniel Werfel in early 2025 and the appointment of Billy Long as a potential permanent commissioner signal further shifts in the direction the IRS will take going forward. These developments, combined with discussions of replacing federal income taxes with tariffs, add complexity to the tax landscape that the firm addresses through its services. The firm’s objective is to help clients stay informed and prepared amid the IRS’s evolving operations. Durfee Law Group focuses on adapting to these changes to support clients’ tax compliance and financial planning needs.
What's Happening at the IRS? © 2025 by Norris Lozano is licensed under CC BY 4.0 
What’s Happening at the IRS?