You’ve probably heard that not long after his January 20 inauguration, President Trump kicked off his second term with a flurry of executive orders. By most accounts, he signed a total of approximately 200 various orders, actions, and proclamations on his first day back in office.
The actions cover everything from withdrawing the United States from the Paris Climate Agreement, declaring a national emergency on the Southern Border, and ending birthright citizenship for children born to undocumented parents to pardoning about 1,500 people involved in the January 6 Capitol riot, renaming the Gulf of Mexico to the “Gulf of America,” and delaying the TikTok ban for 75 days.
Meanwhile, another set of orders involves federal workers. Aside from wanting workers to return to offices, the new president has ordered a hiring freeze.
According to the text of the order, “As part of this freeze, no Federal civilian position that is vacant at noon on January 20, 2025, may be filled, and no new position may be created except as otherwise provided for in this memorandum or other applicable law.”
This move has been portrayed as a cost-cutting measure, but the freeze, which notably applies more harshly to the IRS, could have significant implications beyond budget management. That is particularly true given that tax season starts next week.
Here’s more of what you need to know.
Trump federal hiring freeze 2025
Trump’s federal Hiring Freeze is a 90-day freeze on hiring federal civilian employees across executive departments.
The freeze exempts military, national security, and public safety positions. It requires the Office of Management and Budget (OMB) to develop a plan to reduce the federal workforce through efficiency and attrition. The order to halt hiring came alongside a “Return to In-Person Work” order terminating remote work arrangements for federal employees. That order also:
- Mandates full-time, in-person work at duty stations
- Allows agency heads limited exemptions
Legal backlash: Several lawsuits have already been filed challenging various executive orders signed by President Trump, including against an order to make it easier to terminate career federal employees.
It’s worth noting that while federal hiring freezes are not new (former presidents Jimmy Carter and Ronald Regan implemented them, as did Trump in his first term), they aren’t a universal practice. And interestingly, Trump’s newly implemented hiring freeze carves out a more extended timeframe for the IRS.
“Upon issuance of the OMB plan, this memorandum shall expire for all executive departments and agencies, with the exception of the Internal Revenue Service (IRS). This memorandum shall remain in effect for the IRS until the Secretary of the Treasury, in consultation with the Director of OMB and the Administrator of USDS, determines that it is in the national interest to lift the freeze.”
The timing couldn't be more precarious as the IRS wanted to boost hiring to improve operations and customer services.
Tax season starts soon
The 2025 tax filing season begins Monday, January 27, and the IRS is simultaneously managing the rollout of its expanded Direct File program in 25 states.
Additionally, the executive order comes as former Commissioner Danny Werfel has just stepped down, although he had years remaining in his term. As Kiplinger has reported, Trump’s pick for Commissioner, Billy Long, a former congressman and auctioneer with limited tax experience, awaits U.S. Senate confirmation.
The hiring freeze IRS carve-out adds to a planned shift from the Biden administration’s policies to modernize and strengthen IRS operations. Among those priorities were initiatives to hire more IRS agents and agency staff and focus on modernization and tax compliance for large corporations, high earners, and wealthy nonfilers.
Republican lawmakers have rallied against several Biden-era changes at the tax agency, including IRS Direct File (a new program available in 25 states that allows eligible taxpayers to file taxes for free directly with the tax agency).
IRS funding, billions of which have been clawed back in various stopgap measures since an initial $80 billion was initially allocated to the agency under the Inflation Reduction Act (IRA), has also been an issue. In recent years, false assertions have been made that thousands of IRS agents are coming for the tax dollars of hard-working Americans. And a recently proposed bill proposes to abolish the IRS and rewrite the tax code.
Separately, Trump has recently floated the idea of an External Revenue Service (ERS) — though it’s unclear whether such an agency would be connected to the IRS.
In any case, the implications of the hiring freeze and other key changes (like the likely dismantling of clean energy tax incentives like the EV tax credit expressed in another executive order) could affect millions of taxpayers preparing to file their 2024 taxes.
Tax refund status: Will IRS refunds be delayed this year?
Now that the tax agency faces the prospect of maintaining critical services with constraints on expanding its workforce, tax refund processing concerns come to mind for many.
In a typical year, the IRS processes over 140 million individual tax returns, with an average refund of around $3,100. Also, this month the IRS is automatically refunding unclaimed rebate recovery credits for eligible taxpayers.
- Audit capabilities could be an area of potential disruption. Some wonder if the freeze could reduce the agency's ability to investigate tax discrepancies, particularly among high-income earners and large corporations. (The agency was in the process of hiring additional staff to handle such audits.)
- Could customer service suffer? With fewer staff to handle the agency's many phone calls during tax season (reportedly about 92 million in FY23 ), taxpayers might face extended wait times on phone lines and slower responses to written communications.
So far, Treasury Department officials have been cautious in their public statements, noting that the hiring freeze will remain in effect per the executive order until a comprehensive review determines it serves the "national interest."
However, AICPA vice president for tax policy and advocacy, Melanie Lauridsen wrote the following in a LinkedIn post.
“There is NO CONCERN for the April 15 tax filing season as far as hiring seasonal employees for the filing season. Seasonal employees should have already been hired and received training to begin working from January through May. The IRS will also reallocate workers from other areas to help cover filing season processing.“
Though, Michael Cohn, Editor-in-Chief of Accounting Today, told the news outlet, The Independent, that the freeze "could prove problematic during tax season.”
For taxpayers, the advice remains consistent: be prepared. For some, that might mean filing taxes early if they need or expect a tax refund. But for most, that means:
- Maintaining good financial records and documentation
- Being patient with potential processing and customer service delays
- Considering professional tax assistance
- Staying tuned to tax changes
As the 2025 tax season unfolds, eyes will be on the IRS to see how it manages the constraints and new leadership. Will the agency adapt and maintain service levels, or will taxpayers experience disruptions?
Only time will tell, but one thing seems inevitable: the landscape of U.S. tax administration is changing, and taxpayers will be among the first to feel the impacts.
