Trump’s executive orders could delay tax refunds for millions of Americans

President Donald Trump’s efforts to downsize the federal government could delay tax returns for millions of Americans.

Trump issued an executive order on Jan. 20 freezing hiring at all federal agencies, including the IRS. He also rescinded job offers for new federal hires scheduled to start after Feb. 8. The order came as millions of Americans prepare to file taxes ahead of the April 15 deadline.

The IRS typically ramps up hiring in fall and winter to prepare for tax season. This includes bringing on temporary workers to help process returns and provide customer service. These seasonal employees account for approximately 11% of the total IRS workforce.

With fewer workers to process returns, it is likely that tax refunds will take longer to disburse.

Treasury Secretary Scott Bessent can lift the hiring freeze. The Treasury Department did not respond to questions about whether he plans to do so.

IRS staffing was further complicated by a Jan. 28 memo from the White House offering to pay remote federal workers through Sept. 30 if they resigned by Feb. 6. About half of the IRS workforce is remote.

A week later, the White House said IRS employees who accepted the offer must work through the end of tax season. Some employees who took the offer and resigned early were ordered to return to work.

On Feb. 10, a federal judge in Boston indefinitely extended the Feb. 6 resignation deadline while he considers legal challenges to the offer.

Homeland Security Secretary Kristi Noem wants to further hollow out the IRS by deputizing IRS agents to help with immigration enforcement. In a Feb. 7 memo, she said IRS criminal division agents could help audit businesses suspected of hiring undocumented workers and assist with apprehending and deporting migrants.

Noem’s plan would presumably result in fewer IRS agents investigating tax crimes. The 2022 Inflation Reduction Act, signed into law by President Joe Biden, increased funding for the IRS to investigate and crackdown on fraud by wealthy taxpayers. The nonpartisan Congressional Budget Office predicted this would net $180 billion in additional revenue by 2032. House Republicans have fought to repeal these investments. 

Delays and logjams at the IRS could hit Americans’ wallets. A 2023 poll from the Bipartisan Policy Center and Morning Consult found that 43% of adults rely on tax refunds to cover basic expenses, like food and housing.