IRS Major Decision in April: How It Will Impact Your Tax Return!

As the fiscal year 2024/2025 winds down and the tax deadline has passed, numerous taxpayers are eagerly awaiting their tax credits and rebates. However, significant alterations at the IRS, initiated by the new Department of Government Efficiency (DOGE) recommended by the Trump Administration, could affect these anticipated refunds. The IRS has seen notable changes, including a workforce reduction.

Eligibility for Tax Rebates

Filing your taxes does not automatically entitle you to a tax rebate. Tax rebates are issued when your payments exceed your tax liability to the government. This often occurs for employees with automatically deducted taxes, which might lead to overpayment. It’s also applicable to those who claim tax rebates and credits like the Child Tax Credit. Even individuals below the taxable income threshold might receive refunds due to eligibility for certain credits aimed at assisting low-income families. You can typically check the status of your refund on the IRS website within 48 hours of electronically filing your return.

Significant Recent Changes and Their Impact on Refunds

The IRS has recently undergone a drastic workforce reduction led by DOGE, an advisory group on federal spending initiated by Tesla CEO Elon Musk under the Trump Administration, aiming to save two trillion dollars before their contract ends next July. The IRS’s budget for 2023 was over $16.1 billion. In February alone, 7,000 employees were laid off, and there are plans to cut the workforce by half. This includes significant reductions in the Taxpayer Advocate Service and the IRS’s Direct File department. Some employees have been rehired due to court orders, but the overall reduction will likely delay tax rebates this month.

The Uncertain Future of the IRS

The significant downsizing of the IRS is part of a larger initiative by President Donald Trump, who has proposed replacing the IRS with a system funded through tariffs. According to U.S. Secretary of Commerce Howard Lutnick in a Fox News interview, “Donald Trump announced the External Revenue Service, aiming to abolish the Internal Revenue Service and shift the tax burden to outsiders.” Further changes may include discontinuing the free IRS Direct Filing program, despite its expansion to cover half the states this tax season. Critics argue that existing free filing services make the program redundant and financially wasteful, though these alternatives lack the simplicity of the Direct File system.