The February 25, 2025, episode of "Our Daily Fed" examines significant changes at the IRS during tax season. Lasting 25 minutes, the episode covers the resignation of IRS Commissioner Danny Werfel, workforce cuts, and their potential effects on Americans, sourced from six outlets.

This follows President Trump’s push to replace him with former Congressman Billy Long, aiming to shift the agency’s direction from modernization—fueled by the Inflation Reduction Act—toward a smaller footprint, as noted by The New York Times.

The IRS faces substantial staffing reductions. Reuters and CNN report 6,000 probationary employees, hired within their one-to-two-year trial period, were let go on February 20th. Additionally, ABC News details a deferred resignation program, with over 75,000 federal workers—including likely thousands from the IRS—opting to exit with benefits through September 30th. Federal News Network states the IRS workforce reached 100,000 in 2024, up from 80,000, but with an estimated 11,000 departures, it’s now around 89,000.

These cuts, a 10% reduction, spark concerns mid-tax season. ABC News and The New York Times warn of slower refunds, longer helpline waits, and service disruptions. Reddit’s FedNews reveals employee frustration, citing low morale, case backlogs, and security measures like escorted exits in Kansas City offices.

Broader implications emerge, with Reuters reporting Trump’s team, led by Commerce Secretary Howard Lutnick, proposing an “External Revenue Agency” to replace the IRS with a tariff system—a move experts deem impractical given the agency’s role in funding government operations. Resistance is brewing, too; FedNews posts indicate the National Treasury Employees Union is suing over the “arbitrary” firings, potentially delaying further cuts.

The episode concludes that Werfel and O'Donnell's exit and Long’s arrival, amid significant layoffs, signal a turbulent transition for the IRS. Taxpayers should brace for delays and ensure filings are accurate as the agency navigates this upheaval with roughly 89,000 employees remaining.

DISCLAIMER: AI Generated

• CNN
• The New York Times
• Reuters
• Federal News Network
• ABC News
• Reddit (FedNews)