Staffing shortages at the Internal Revenue Service (IRS) have created a backlog of nearly 590,000 amended tax returns, potentially delaying refunds for American taxpayers, according to a recent Treasury Department watchdog report.
The IRS workforce has been reduced by approximately 27 percent following layoffs by the Department of Government Efficiency (DOGE), overseen by billionaire Elon Musk in the early days of the Trump administration. The cuts 'could result in delays in taxpayers receiving refunds,' the report warned.
Taxpayers filing amended returns are most at risk of delayed payments, according to an Axios analysis. Amended returns are typically filed to correct errors in income, deductions, dependents, credits, tax liability or refund amount. The backlog of amended returns is about 20,000 higher than a year ago and roughly four times the pre-pandemic level in 2019.
The report also found that the IRS has reduced its telephone customer service goal from 85 percent to 70 percent, meaning it now handles only seven out of ten calls. The slowdown in processing will likely cost the IRS billions, as the department pays 7 percent interest on refunds issued more than 45 days after the filing deadline. In 2025, this cost the IRS over $2.6 billion.
