This tax season is rife with uncertainty, as the world’s richest person looks to shake up the Internal Revenue Service and the commerce secretary calls to eliminate it — but filers still need to carry on as usual, tax experts say.
“Whatever they’re going to have to do to make their tax return accurate and true, they have to do,” said Christina Wease, director of the Alvin. L. Storrs Low-Income Taxpayer Clinic at Michigan State University.
“In the face of uncertainty,” tax filers should consider getting their returns in as soon as they can, ideally electronically, said Janet Holtzblatt, a senior fellow at the Urban-Brookings Tax Policy Center. “This was the case a few years ago with the pandemic,” and the advice still holds true, she said — echoing a common refrain among tax advisers even in uneventful tax seasons.
The current season has already been anything but.
Alina Habba, an adviser to President Donald Trump, said at a conservative conference Thursday, “We’re firing a bunch of the IRS today, so don’t worry.” Her remarks followed Associated Press reporting that thousands of probationary employees are slated to be cut this week.
Late Wednesday, Commerce Secretary Howard Lutnick told Fox News’ Jesse Watters that Trump wants to “abolish” the IRS “and let all the outsiders pay” via trade policies including tariffs (which tax American importers, not foreign businesses or governments). Watters then told his more than 3 million followers on X that their “tax rates, interest rates, and mortgage rates are going to come hammering down.”
“Abolishing the IRS or even, say, cutting funding to the IRS doesn’t alter our tax system at all,” said Kathleen DeLaney Thomas, a tax law professor at the University of North Carolina at Chapel Hill. “Only Congress could decide to repeal the many statutes in the Internal Revenue Code that provide the framework for our federal tax system.”
Meanwhile, Elon Musk’s Department of Government Efficiency initiative is pressing for access to an IRS database containing sensitive taxpayer information, an effort that has drawn a lawsuit alleging privacy and tax law violations. The plaintiffs also claim DOGE’s request poses a potential conflict of interest, since the data could involve tax records and investigations of Musk’s business competitors.
Tax policy and legal experts say much remains to be seen about the extent of any access to filers’ data DOGE may gain and what the group might do with it. Two sections of the IRS tax code protect the confidentiality of returns and prohibit executive branch influence over agency audits and investigations.
“For decades, since we’ve had these privacy laws enacted by Congress, it’s pretty much just been understood that IRS civil servants handled this data,” Thomas said.
In recent weeks, DOGE has made an aggressive push to slash federal spending and root out purported fraud and abuse across the government. While some of the initiative’s high-profile claims have been called into question or included errors, conservative pundits and administration officials continue to promote them.
“Waste, fraud, and abuse have been deeply entrenched in our broken system for far too long,” said White House spokesperson Harrison Fields, reiterating a statement he provided Sunday to NBC News. “It takes direct access to the system to identify and fix it.”
The IRS didn’t respond to NBC News’ requests for comment.
In the meantime, taxpayers are still staring down the usual deadline to file their returns and have few ways to protect themselves from any potential fallout from non-IRS staffers’ possible involvement.
“We do not yet know the impact on IRS operations but are monitoring closely to ensure we can help hardworking Americans get every dollar they deserve,” said a spokesperson for H&R Block, a major tax preparer. “What we do know is tax returns are still due by April 15th.”
Holtzblatt said the DOGE efforts have caused “a lot of uncertainty and a lot of concern … [that] will be spilling over to the rest of us during this filing season, and particularly those of us who have concerns with how our tax information is used.”
But she emphasized that filing a correct and complete return isn’t optional. If taxpayers are concerned about DOGE employees potentially seeing their bank account information, they could opt not to receive refunds via direct deposit. The IRS also offers checks by mail, but that could take longer.
Mary Clements Evans, a certified financial planner in Emmaus, Pennsylvania, has been advising clients not to file their returns by mail either, citing the reports of workforce cuts at the IRS. “Those paper filings, they’re going to require people looking at them,” she said. “One of the great things the IRS has done over the years is they’ve automated the processes.”
Evans said she’s now fielding clients’ concerns about how changes at the agency might affect returns this year. Many taxpayers rely on the IRS for support, partly because of an ongoing shortage of certified public accountants, and she said she’s worried that staff firings could leave filers with fewer free resources. But she echoed other tax experts in saying it remains a good idea to file sooner rather than later.
“As far as the vast majority of individuals who are filing, they can go ahead and file,” Evans said.
Holtzblatt suggested using the IRS’ new Direct File tool since it’s less labor-intensive. The free filing system was piloted last year and has since expanded to 25 states.
For fiscal year 2023, the IRS processed nearly 271.5 million tax returns and other forms, and issued $659.1 billion in returns, according to agency data. Taxpayers submit a wide variety of personal information in those documents, all of which helps calculate their tax liability. IRS employees then view taxpayers’ returns to verify their filing status, exemptions and deductions before administering a refund if due. If something seems off, or if a taxpayer is selected for a random audit, the IRS will reach out via mail to request further information.
The IRS database that DOGE is trying to access, called the Integrated Data Retrieval System, contains a slew of data that’s central to this process. IRS employees are allowed to access it on a need-to-know basis, said Nina Olson, who served as the national taxpayer advocate at the IRS from 2001 to 2019. Agency staffers, usually auditors or case advocates, can use the IDRS to pull up individuals’ tax returns, which can include from their Social Security numbers and income to details about their health histories and dependents.
“You have to specify what you are going to be doing in order to be able to meet statutory requirements for having access to return information,” Olson said, who herself did not have access to the IDRS in her role at the time. “Otherwise, it’s a crime to access it.”
Normally, IRS systems containing taxpayer data are secure and information is locked down, said Amy O’Hara, executive director of the Georgetown University Research Data Center, which deals with federal statistics. She said breaches are rare, usually personnel-related and punished quickly.
Under current laws, DOGE staffers would have to meet the same requirements to access the IDRS as any other contractor or employee, O’Hara said.
“There are these checks and balances in place to ensure the integrity of the systems,” she said. “We just need to make sure that that integrity holds.”
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