IRS needs 11,000 hires to ‘maintain’ phone support for 2026 filing season, plans on 60% cut to IT staffing
The IRS is preparing for major budget and staffing cuts next year, but simultaneously, congressional Republicans are trying to pass a budget reconciliation package that would create much more work for the tax agency.
Former IRS leaders say they’re concerned the agency will have fewer resources to provide an acceptable level of customer service during next year’s filing season — especially if President Donald Trump’s “One Big Beautiful Bill” makes it through Congress.
The tax-and-spending cuts bill would have the IRS scrambling to prepare its IT systems and employees for major changes to the tax code ahead of next year’s filing season.
The Trump administration’s fiscal 2026 budget request aims to cut the IRS from nearly 97,000 employees to about 78,000 employees — a staffing cut of about 20%.
Its total budget would go from more than $ 22 billion to about $ 14 billion — a 37% reduction.
The Yale Budget Lab projects staffing cuts of this magnitude would result in the IRS collecting $ 159 billion less in revenue over the next 10 years.
The FY 2026 budget request proposes a nearly 60% cut to IRS technology and operations support staffing, and a nearly 40% cut to its spending.
The budget request states technology and operations is the agency’s “single largest component” of its budget request, and “reflects its critical role in funding IRS technology.”
Despite these cuts, the Treasury Department says the IRS expects to “substantially complete” most of its key IT modernization initiatives in the next two years.
The modernization efforts are focused on increased automation and integrating a patchwork of IT systems, giving employees a “360 view of relevant tax information to provide a better experience for taxpayers they interact with.”
Despite the budget and staffing cuts, the IRS plans to hire more than 11,000 call center representatives to “maintain” its current level of phone service to taxpayers. The agency is asking for $ 852 million to make these hires, and to roll out automation tools to further assist customers.
Without these requested funds, the IRS says it will only be able to answer 16% of calls during next year’s tax filing season, and only 11% of all calls in fiscal 2026.
“Funding this investment below the requested level will significantly reduce telephone [level of service] and impair taxpayer services,” the budget request states.
But the IRS may not be able to meet its hiring goal. The agency hasn’t previously hired this many call center representatives, even when it had tens of billions of dollars to replenish its workforce under the Inflation Reduction Act.
Former IRS Commissioner Danny Werfel, speaking last week on a panel with three of his predecessors, said funding in the Inflation Reduction Act allowed the IRS to address “immediate performance issues,” including a record-low level of phone service in fiscal 2022.
According to the 2026 budget request, call center representatives answered nearly 9 million calls during this year’s filing season. About 87% of calls to the IRS were answered, and callers waited on hold for an average of three minutes.
“We built a resilient operation that enabled a successful filing season this past year. It was resilient enough to absorb many of the staff cuts, but I don’t think it will be resilient enough to absorb it in perpetuity,” Werfel said during the May 28 panel.
Werfel said the IRS, in his two years on the job, made more taxpayer-focused updates to its website than in the past 20 years combined.
“That’s because of funding. It’s not rocket science, nothing special other than having resources and bringing in some [talent] to blend with the existing team to unlock some of these successes,” he said.
The IRS put 50 senior IT leaders on paid administrative leave in March. Rajiv Uppal, the agency’s chief information officer, stepped down at the end of April.
Chuck Rettig, who served as the IRS commissioner during the first Trump administration, said new hires are no substitute for the institutional IT knowledge the agency is losing.
“The technical areas where the IRS is hugely deficient, you cannot rely on what today would be entry-level people, or less than five years,” Rettig said.
Treasury Secretary Scott Bessent told the House Appropriations Committee last month that an “AI boom” would help the IRS to keep up with its workload amid major staffing cuts.
Former IRS Commissioner John Koskinen, who served under the Obama administration, said there are limits to what AI can do to replace employees.
“It’s not as if the IRS has never done anything that looks like automation. But the question is, no matter how sophisticated the artificial intelligence is, it simply produces questions, and somebody’s got to go then pursue those, with either a call, a letter, an investigation, or a full-blown audit,” Koskinen said during the May 28 panel.
Former IRS Commissioner Larry Gibbs, who served under the Reagan administration, said the IRS will see a much higher workload getting ready for next year’s filing season, if Congress approves major changes to the tax code under the budget reconciliation bill the House passed.
“You’re going to change a lot of the tax law with this ‘big, beautiful bill,’ and that means you’re going to have to train your folks on the telephone. That means the demand levels are going to be huge when you get toward the filing season next year, if this act passes. That’s where the risk is, from the standpoint of the IRS next year — non-compliance,” Gibbs said.
By June, IT employees at the IRS are already preparing for next year’s filing season. Koskinen said that workload will only grow if Congress changes the tax code.
“The minute you get a new tax law — and there are lot of tax changes in the bill going through Congress — you then have to prepare for those and implement them as you go along. There’s a lot of work just making the system work without making any changes in it,” Koskinen said.
House Ways and Means Committee Ranking Member Richard Neal (D-Mass.) said in a statement that the Trump administration’s budget request would “undermine customer service and enforcement, enable the richest to dodge what they owe and shift the burden onto everyone else.”
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