GAO Report: Severe Risks to IRS Operations and Workforce
Summary
A GAO report details severe risks to IRS operations and workforce due to significant staff resignations, early retirements, and leadership turnover in 2025. The report highlights threats to customer service, backlog reduction, and technology system readiness, recommending the IRS develop a comprehensive workforce plan.
What changed
The Government Accountability Office (GAO) has released a report (GAO-26-108116) detailing significant risks to the Internal Revenue Service's (IRS) operations and workforce. In 2025, the IRS experienced substantial staff losses, with over 17,000 employees (approximately 17% of the workforce) leaving through resignation and early retirement programs, including over 5,000 in critical filing season roles. The agency also faced extensive leadership turnover, with seven commissioners in 2025 alone. These challenges threaten the IRS's ability to provide high-quality customer service, reduce its correspondence backlog, prepare technology systems for upcoming tax seasons, and implement tax law changes.
The GAO recommends that the IRS develop a strategic workforce plan to address these issues and ensure effective taxpayer service in 2026 and beyond. The report notes that while the 2025 filing season was largely insulated from these workforce changes due to deferred departures, the long-term implications are severe. The IRS lacks a dedicated team to manage agency reforms and ensure quality information sharing, potentially hindering the success and sustainability of modernization efforts. Furthermore, critical technology systems were reported as not ready for the 2026 filing season, impacting return processing and customer service functions. Regulated entities, particularly those interacting with the IRS, should be aware of potential service delays and operational changes.
What to do next
- Review IRS workforce challenges and potential impacts on tax processing and taxpayer services.
- Monitor IRS's development and implementation of a new strategic workforce plan.
- Assess potential impacts of IRS operational changes on compliance activities for the 2026 tax season.
Source document (simplified)
GAO-26-108116 Published: Mar 16, 2026. Publicly Released: Mar 16, 2026.
Fast Facts
IRS processes over 150 million tax returns during the annual tax filing season. Throughout 2025, thousands of IRS staff resigned or retired early, and the agency had extensive leadership turnover during organizational changes. These major workforce challenges threaten IRS's ability to
Give taxpayers high-quality customer service
Reduce its correspondence backlog
Address staff losses in its new workforce plans
Prepare technology systems for upcoming tax filing seasons
Implement tax law changes
We recommended that IRS develop a plan to address its workforce issues. Doing so may help it effectively serve taxpayers in 2026 and beyond.
Two pages of a paper copy of the individual tax form 1040 and a pencil.
Highlights
What GAO Found
In the 2025 filing season, the Internal Revenue Service’s (IRS) tax return processing and customer service performance were similar to prior years. IRS did not meet its 13-day goal to process paper returns but took fewer days to do so in 2025 (16) than in 2024 (20). IRS also answered about 9 million phone calls in both years. IRS’s backlog of taxpayer correspondence remained above pre-pandemic levels at the end of filing season and fiscal year 2025 as IRS continued to struggle balancing demands of phone service and correspondence. But IRS does not have a plan to reduce the backlog. Without a plan, IRS risks not effectively reducing its backlog and may provide less timely service to taxpayers.
In 2025, IRS experienced large-scale changes to its workforce. IRS adjusted operations to comply with new directives, including return to in-person work. IRS data show that 17,047 employees—around 17 percent of IRS’s workforce as of January 2025—left IRS via deferred resignation and early retirement programs in 2025. This included 5,162 filing season staff in units that process returns and provide customer service. However, the 2025 filing season was mostly insulated from these changes. IRS required filing season staff who accepted deferred resignation or early retirement to stay until after the filing season. IRS officials told GAO that IRS is developing a new strategic workforce plan to align with the current administration’s priorities, and its prior plans are on hold. If IRS’s new plan does not address its workforce challenges, IRS will be unable to systematically identify future workforce needs and strategies for related goals.
IRS 2025 Separations via Deferred Resignation and Early Retirement Programs
Note: For more details on IRS’s 2025 separations data, see figure 9 in GAO-26-108116.
IRS had vacancies and turnover in leadership roles throughout 2025, including having seven different commissioners through August. IRS officials were uncertain about the status of some workforce changes like agency reorganization plans, and some modernization efforts for filing season functions have been in flux, such as activities to digitize paper documents. However, IRS lacks a team that is responsible for day-to-day management of agency reforms and ensuring quality information is shared across IRS. Without such an implementation team, IRS may struggle to ensure that reform efforts are successful and sustainable, which could in turn hinder IRS’s ability to provide quality services to taxpayers.
In addition, in December 2025 amid implementing the One Big Beautiful Bill Act (OBBBA), an IRS internal report stated that critical technology systems would not be ready for the 2026 filing season start. It also stated that return processing and customer service functions would enter the season undertrained or understaffed, which could result in errors and poor service for taxpayers.
Why GAO Did This Study
During the annual tax filing season, IRS processes millions of tax returns and issues hundreds of billions of dollars in taxpayer refunds. IRS also provides customer service to tens of millions of taxpayers. IRS carried out the 2025 filing season and its plans for 2026 during a time of swift, immense change for the federal workforce. IRS’s workforce changes and recent tax law changes could exacerbate the agency’s long-standing challenges to process tax returns on time and meet customer service demands.
GAO was asked to review IRS’s 2025 filing season performance. This report assesses IRS’s (1) staffing levels and processing and customer service performance during the 2025 filing season, and (2) through the end of fiscal year 2025, and (3) workforce planning and modernization efforts for future filing season operations. GAO reviewed IRS and Department of the Treasury documentation, executive orders, and OBBBA tax provisions. GAO analyzed IRS staffing and performance data related to tax return processing and customer service during and after the 2025 filing season. GAO visited one IRS processing facility and interviewed IRS officials and stakeholders from three tax industry groups.
Recommendations
GAO is making three recommendations to IRS to implement a plan to address its correspondence backlog, update its strategic workforce plan, and establish an implementation team to manage agency reform efforts. IRS neither agreed nor disagreed with these recommendations and said it would provide additional details in its response to the final report.
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
| --- | --- | --- |
| Internal Revenue Service | The Commissioner of Internal Revenue should develop and implement a plan for addressing the agency's correspondence inventory backlog. (Recommendation 1) | Open When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information. |
| Internal Revenue Service | The Commissioner of Internal Revenue should establish an implementation team to manage the agency's reform efforts and provide and receive timely, quality information that meets the needs of leadership and staff. (Recommendation 2) | Open When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information. |
| Internal Revenue Service | As IRS develops a strategic workforce plan to align with Treasury's strategic plan for fiscal years 2026 through 2030, the Commissioner of Internal Revenue should build off IRS's workforce plan for fiscal years 2024 through 2026 that was finalized in June 2024 and incorporate plans to address the loss of thousands of filing season staff. IRS's new plan should include for filing season operations (1) long-term strategies to achieve programmatic goals, (2) mechanisms to track progress toward achieving those goals, and (3) capacity-building efforts for essential positions. (Recommendation 3) | Open When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information. |
Full Report
GAO Contacts
Jessica Lucas-Judy Director Strategic Issues lucasjudyj@gao.gov
Media Inquiries
Sarah Kaczmarek Managing Director Office of Public Affairs media@gao.gov
Public Inquiries
Topics
Tax Policy and Administration Taxpayers Tax filing Federal workforce Human capital management Inventory Customer service Workforce planning Individual retirement accounts Tax returns Accounts
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