"A fiscal centerpiece of President Donald Trump's agenda so far has been his pledge to lower taxes, and Americans are close to seeing healthy refunds from their 2026 filings. But actually seeing those returns show up on time might not be so straightforward, according to a recent federal watchdog report, largely due to another of Trump's signature policy stances. The Trump administration's purge of the federal bureaucracy last year did not spare the Internal Revenue Service, the agency responsible for collecting taxes and processing returns."
"The IRS now employs around as many people as it did in 2021, and due to last year's prolonged shutdown, the agency was unable to hire and train employees to assist during filing season, according to a Treasury Department watchdog report released last week. This, combined with a mounting backlog of unprocessed tax-related items from years prior, could add up to disappointment for filers expecting prompt returns."
President Donald Trump's tax cuts are expected to produce large refunds for 2026 filers, but IRS capacity constraints threaten timely payouts. The agency lost roughly 25,000 employees—about 25% of its workforce—through layoffs and deferred resignations, with additional separations during the government shutdown. Staffing levels have returned only to 2021 counts, and hiring and training for filing season were disrupted by the prolonged shutdown. A backlog of unprocessed tax items from prior years remains. Reduced staff plus accumulated work could delay return processing and taxpayer refunds, undermining expectations of prompt windfalls from recent tax changes.
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