Mounting Delays Undermine Public Trust in IRS Refund Process

Get ready for more unhappy clients and tougher conversations.

Identity Theft Victim Assistance (IDTVA) Workload
Pending IDTVA Cases 387,000
Average Resolution Time 602 days
Percent of Affected Taxpayers Below 250% of Federal Poverty Line 69%
Pending cases and processing delays stress hundreds of thousands of taxpayers financially.

By CPA Trendlines Research

The Internal Revenue Service is taking an average of 20 months to resolve identity theft cases, leaving hundreds of thousands of taxpayers in financial limbo, disproportionately harming low-income households and straining the resources of CPA firms and tax professionals.

MORE TaxBrace Yourself: IRS 25% Staff Cuts Mean Big Trouble for Tax Pros and Clients | What to Watch in the One Big Beautiful Bill  | IRS’s Big Annual Report: Already Out of Date as Agency Grapples with Chaos and CutsBusy Season Barometer Stats: Who’s Responding and How They’re DoingAccountants Reporting a Pretty Good YearTax Season Faceplant: Accountants Overrun by Late Chaos

For tax professionals, the stakes are high and the immediate need is clear: Set client expectations, document communication with the IRS, and explore hardship cases that might qualify for expedited handling. At the policy level, the delays are fueling calls for funding, automation, and clearer transparency metrics from the IRS.

“Victims entitled to refunds are waiting nearly two years to receive them,” Collins says. “These delays disproportionately affect vulnerable populations dependent on their refunds to meet basic living expenses.”

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Brace Yourself: IRS 25% Staff Cuts Mean Big Trouble for Tax Pros and Clients

A hobbled agency could have trouble meeting revenue goals and basic taxpayer services.

Taxpayer Advocate Collins: “Significant challenges.”

By CPA Trendlines Research

The Internal Revenue Service is reeling from massive Trump Administration staffing cuts, which have left the agency knee-capped with nearly 26,500 fewer employees, raising red flags for tax professionals about service quality, enforcement consistency and case resolution delays.

MORE Tax | What to Watch in the One Big Beautiful Bill | Quick Tax TipIRS’s Big Annual Report: Already Out of Date as Agency Grapples with Chaos and CutsBusy Season Barometer Stats: Who’s Responding and How They’re DoingAccountants Reporting a Pretty Good YearTax Season Faceplant: Accountants Overrun by Late Chaos

The IRS has lost 25.9 percent of its workforce since Jan. 25, 2025, with headcount dropping from 102,113 to 75,702 as of June 4, 2025. Most of the cuts come from voluntary separation incentives rather than layoffs, according to the National Taxpayer Advocate 2026 Objectives Report to Congress.

Yet, the result is the same: fewer agents, auditors, and call center staff, just as tax complexity and demand for support are expected to increase.

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IRS’s Big Annual Report: Already Out of Date as Agency Grapples with Chaos and Cuts

Three commissioners later, and 30,000 staffers gone in just weeks.

IRS headquarters, Washington

By CPA Trendlines Research

The IRS Data Book 2024 presents a vision of a revitalized agency on a steady upward climb – just before a wave of events turned that vision upside down.

MORE: Tax and Tax Practice | IRS Makes Big Progress But, | Tax Season 2025 Begins. Ready or Not | Why Chaos at the IRS Spells New Work for Tax Professionals | Tax Turmoil and Opportunity: Breaking Down the Q1 2025 Tax Landscape

Just released, it recounts the IRS’s activities from October 2023 through September 2024.

But while the book is dressed in the confident prose of a federal annual report, events since its close date have added more than a few asterisks to its outlook.
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Accountants Turn Negative Amid Tariffs, Trade, Uncertainty

man holding umbrella while standing in stormy ocean

Survey respondents aren’t shy about placing blame.

Launch survey here

By CPA Trendlines Research

If you’re getting a little nervous about the general business environment, you’re not alone.

The 2025 CPA Trendlines Busy Season Barometer has picked up a serious swing toward pessimism among the professionals who know the numbers.

MORE Barometer: What CPA Firms Could Do Better | SURVEY: Which Client Industries Will Grow This Year | Tax Preparers Share Advice for Your Clients | Staffing, Tech, Prices Top Tax Pros’ Concerns | Tax Pros Gear Up for a Better Busy Season | Tax Season 2025 Begins. Ready or Not. | MORE Surveys & Research
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Before the inauguration, the outlook for the nation’s economy was moderately hunky-dory. Almost 60 percent of respondents predicted the economy would get better over the next 12-18 months. Only 26 percent figured it would get worse.

Pessimism Doubles

That was then. This is now. By the Ides of March, 68 percent saw an economic downturn, and only 21 percent were optimistic. Now, by the second week of April, 74 percent are hunkering in the pessimist camp. In fact, the share of those who fear things will get “much worse” has doubled from 14.5 to 29 percent.

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