By Karen Hube

Recent improvements in taxpayer services are expected to be unwound by the firing of nearly 7,000 Internal Revenue Service employees, which began on Thursday at the height of the tax-filing season.

There are steps you can take as a tax filer to avoid problems. They include knowing what times of day to call the IRS hotline, getting things right the first time on your tax return, and keeping a paper trail in case your return is mishandled. More on all this later.

Slashing the IRS's workforce means that the troubles that exasperated taxpayers for years in their dealings with the agency are likely to return, tax experts say.

"We will see longer wait times on the phone, and it could lead to delayed refunds and issues with resolving matters," says Clay Hodges, director of national tax at Moss Adams, as layoffs began Thursday. "The IRS has been trying to get more modernized and more efficient, but this changes today."

The layoffs of nearly 7% of the IRS's 100,000 employees were directed by the Department of Government Efficiency (DOGE) run by President Donald Trump's advisor Elon Musk.

Workers getting let go are those who have been with the agency for less than two years, which means they are classified as probationary workers.

These are the folks the IRS has been hiring recently to improve its capabilities after years of dismal service and near-zero audit rates for the most complex tax returns.

For more than a decade until 2020, Congress chipped away at the IRS's budget even as the agency's volume and complexity of work grew. It had 20% fewer employees in 2020 than it had a decade earlier.

Then the pandemic hit and troubles at the agency became glaring. Office closures and a spike in administrative challenges as Congress passed temporary tax measures caused extreme backlogs. The IRS piled tax returns in storage facilities, and it issued many refunds months late.

In 2022, Congress passed some $80 billion in IRS funding under the Inflation Reduction Act. The funding was scheduled over 10 years and targeted for upgrades to the IRS's archaic computers, expanding staff to handle services and audits of complex tax returns.

The Republican-led Congress has pared back funding since then. The $80 billion has been shrunk to $40 billion, and the remaining funding could be on the chopping block.

The current staff cuts come under DOGE's goal to improve government efficiency, but tax experts say they almost certainly will have the opposite effect.

If you are an individual taxpayer, here are three tactics to keep in mind this year:

Be Strategic in Getting Questions Answered

The shortest telephone wait times are typically first thing in the morning. The IRS takes calls from 7 a.m. to 7 p.m. Monday through Friday.

Sometimes, you may have to try again, says Paul Joseph, a tax attorney at Joseph & Associates in Williamston, Mich.

"I've been disconnected while on the phone with an agent. Then you go back to the beginning of the process. You'll get a different agent and will have to start your conversation from the beginning," he says.

Before you even make a call, visit the IRS's website (IRS.gov). The agency has improved its digital resources -- you may find answers you're looking for online.

Get Things Right the First Time

Avoid errors on your tax return that would likely result in an IRS audit letter and frustrating back-and-forth with the agency.

If you fail to attach an important document, such as your Form 1098 that reports mortgage interest or a Form 1099-INT showing bank interest, or if you make a math error, you can expect to hear from the IRS even at its reduced staffing levels.

Those kinds of errors are low hanging fruit for audits, because they're flagged by computers that match documents the IRS receives from brokerages and other firms you do business with against the documents you supply.

Even if you use tax preparation software, be vigilant, says Rob Burnette, an investment advisor and tax preparer at Outlook Financial Center in Troy, Ohio.

"I worked with one individual who made a simple keyboard entry error because they didn't know where the decimal point landed. They thought they were entering $1,071 in mortgage interest, but they entered $107,100," Burnette says. "The software let that go through. They got an $8,000 refund and had to return $6,500 of it."

Leave a Paper Trail

Keep a log of your communications and copies of any letters you write to the IRS, Joseph says.

Communications get lost at the agency.

"For instance, one client was penalized for something, and I got the penalty abated," Joseph says. "Four years went by, and he got a penalty notice for the same issue."

If you maintain records, you can demonstrate you have been trying to resolve issues or have already done so, he says.

Write to editors@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

February 22, 2025 02:00 ET (07:00 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.