The IRS pushed out roughly 28,000 employees in 2025 — about 27% of its entire workforce. An internal memo from the agency’s own top HR official warned Treasury that the cuts put the 2026 filing season “at risk” and that processing of returns, balance-due accounts, delinquent accounts, and taxpayer correspondence “remains an ongoing issue.” The agency got emergency authority to hire 8,000 people back on an expedited basis, but that authority only runs through September — and hiring, training, and getting new staff productive takes months you don’t get back.
If you’re a business owner sitting on an amended return, a penalty abatement request, an Offer in Compromise, or a notice response that’s gone quiet, here’s what that quiet actually means: not “resolved.” Just “not yet looked at.”
The mistake owners make: reading silence as good news
I see this every year, and the staffing cuts make it worse. A client gets a balance-due notice, sends in a response or an abatement request, and hears nothing for four, six, eight months. They assume the IRS accepted their explanation and moved on. Then a follow-up notice shows up — now with months of additional penalties and interest tacked on, because the account was never actually adjusted. It just sat in a queue.
The IRS’s own penalty and interest clock doesn’t pause while your file waits for a human being to open it. Interest compounds daily. The failure-to-pay penalty runs up to 25% of the unpaid balance. None of that cares whether the agency is understaffed.
What’s actually slower right now
Based on the reporting around this memo and the agency’s own workforce data, expect longer waits specifically on: correspondence audits and notice responses, amended return processing, first-time penalty abatement requests, and Offers in Compromise. These are all functions that depend on a person opening a file and making a judgment call — not automated processing. The first-time penalty abatement process already took months in a fully-staffed IRS; budget for longer now.
Automated notices, by contrast, keep firing on schedule regardless of staffing — the letters that escalate from a balance-due notice toward a lien or levy are generated by computer, not by an overworked employee. That’s the trap: the collection machinery doesn’t slow down even when the review and resolution side does.
What to actually do differently
Respond fast, and keep proof you did. Certified mail with a return receipt, or a dated confirmation if you’re filing electronically. If a case takes eight months to open, you want a clean paper trail showing you responded inside the deadline — not a memory of having done it.
Don’t let a second notice surprise you. If you responded to a CP2000 or a balance-due letter and haven’t heard back in 90 days, that’s not unusual right now — but it’s also not a reason to stop tracking the account. A CP2000 notice that goes unanswered converts into a formal assessment whether or not anyone at the IRS reviewed your side of it first.
Check your account directly instead of waiting on mail. You don’t have to rely on postal timing to know where things stand. A tax professional can pull your account transcript directly from the IRS and tell you the actual status — paid, pending, or escalating — often faster than a letter would confirm it.
Build in a longer runway for anything discretionary. If you’re planning around an Offer in Compromise or an installment agreement negotiation, assume it takes longer this year than it would have two years ago, and plan your cash flow accordingly.
The bottom line
A short-staffed IRS doesn’t mean fewer consequences — it means slower answers and a collections system that keeps moving on autopilot in the meantime. The businesses that get hurt by this aren’t the ones who owe money. They’re the ones who assumed silence meant the problem went away.
This post is for general informational purposes only and does not constitute tax or legal advice. IRS processing times vary and are subject to change. Consult a qualified tax professional about your specific notice or account situation. Geiger Tax & Accounting, Amityville, NY · (631) 532-5622 · info@geigertax.com.