Taxpayers calling the IRS for help processing their taxes this filing season may find it harder than normal to get someone on the phone, experts say, a problem that is only expected to get worse next year with staffing cuts that could slash the workforce considerably.
For this year, data of tax return processing times shows numbers largely in line with those from last year. IRS employees involved in the 2025 tax season were not allowed to accept a buyout offer from the Trump administration until after the taxpayer filing deadline of April 15, though thousands of probationary workers were laid off earlier this year.
Legal experts in tax compliance say the long wait times are going to increase as more buyouts and layoffs take effect.
Eric Santos, the executive director of the Georgia Tax Clinic, which provides free tax law services to low-income taxpayers, says wait times for the IRS’ phone line are markedly longer than usual and IRS staff are overwhelmed with the increase in work.
The IRS staff “basically tell us they don’t have time to look at certain cases,” Santos said. “The work is getting spread across fewer and fewer people.”
The reduction in workers — which may end up being nearly half the entire IRS workforce — is part of the Trump administration’s efforts to shrink the size of the federal workforce through billionaire Elon Musk’s Department of Government Efficiency by closing agencies, laying off nearly all probationary employees who have not yet gained civil service protection and offering buyouts to almost all federal employees through a “deferred resignation program.”
Earlier this month, the IRS began layoffs that could end up cutting as many as 20,000 staffers — up to 25% of the total workforce. The roughly 7,000 probationary IRS workers who were laid off beginning in February were recently ordered to be reinstated by a federal judge, though it’s unclear whether those workers have been called back into work.
Comparing figures through the first week of April from 2024 and 2025, 101.4 million returns were processed this year compared to 101.8 million tax returns last year. Refunds are up, with 67.7 million issued this year compared with 66.7 million in 2024.
But Santos and others worry that the 2026 filing season could be negatively impacted by the loss of thousands of additional tax collection workers who are expected to exit the agency through planned layoffs and buyouts.
“I don’t see how they’re going to keep up with tax filing season next year,” Santos said. “I think its a fair question to ask now.”
A Treasury spokesperson who was not authorized to speak publicly and spoke to The Associated Press on the condition of anonymity said in a statement that IRS staffing reductions were part of other improvements the agency is taking to be more efficient and improve service.
Sakinah Tillman, director of the University of the District of Columbia Tax Clinic, has not seen a delay in processing refunds this year but has seen delays in reaching the IRS by phone.
She worries that the phone delays could hurt clients going through collections who are trying to settle their debts.
“What happens when clients try to become compliant?” she asked. “Or when people who are willing and able to pay but they just can’t get someone on the phone?
Former IRS Commissioner John Koskinen told the AP that even in a normal year the IRS’ responsiveness slows the further into tax season it gets.
“Next year, if they cut 10,000 or 20,000 employees, they’re headed back to really bad taxpayer service on the phone,” he said. “And the taxpayer priority line will become an oxymoron.”
Lee Seung-gun—or “SG” for foreigners unfamiliar with Korean pronunciation—has a classic startup founder story that mixes tenacity, repeated failure, ultimate success…and dental care.
It started in 2011, when Lee left a Samsung-owned private hospital to start Viva Republica. “I started as a dentist, like all the other Asian children whose parents want their kids to be neurosurgeons or dentists,” he says with a laugh.
“When I was 29 or 30, I had no dream. I just wanted to be a famous dentist,” he remembers. But he soon grew restless with just helping people on an individual scale. “To create impact at scale, I quickly realized that I had to focus on technology.”
His push into entrepreneurship had a difficult start. He devoted 150 million won of savings—about $105,000—towards his new venture. “For the first five years, I failed eight times,” he says. He reels off a couple of what he calls “rubbish ideas”: Social media, a voting app.
A Bloomberg report from 2018 noted that, one point, Lee had just 20,000 won ($14) in the bank, and was pleading with the families of employees to let them keep working without pay.
Then, he found an idea that worked: a money transfer service. “Toss was another stupid idea, but we were crazy enough to do it, because we had nothing to lose,” he says with a smile. “And here we are.”
Almost 15 years after its founding in 2011, Toss is now part of a larger fintech “super app,” a single platform that combines banking, insurance, stock trading, and money transfer services.
South Koreans have an average of five bank accounts and four credit cards—which means a lot of different financial accounts to juggle. Lee thinks that’s why Toss has proved so popular, as Koreans have “more occasions to check their finances.”
Viva Republica is now one of Korea’s most prominent startups, worth about $7 billion after a 2022 funding round. The company boasts backers like GIC, Paypal, and Qualcomm Ventures. Lee has also become one of South Korea’s newest billionaires, according to a 2021 estimate from Forbes.
The Toss platform claims to have close to 30 million registered users, which would be equal to around 60% of South Korea’s entire population. Over half of the company’s 25 million monthly active users visit the app at least 10 times a day.
“Our monthly active userbase is actually a little shy of that of Instagram [in Korea],” he boasts.
Super-app success
Asia is covered in super-apps, where platforms like Tencent’s WeChat include services like messaging, payments, food delivery, news, games, and more. Finance is a popular service for budding super-apps, even for non-finance companies, with Singapore’s Grab and Sea, and Indonesia’s GoTo among Asian platforms with fintech divisions.
Super apps keep users on a single platform, rather than sending them off to another company. That allows for cross-promotion, resource sharing, and other support between various services. It also makes it harder to switch to another platform: If everything you ever need is on one app, why would you try something else?
Yet super apps have not taken off in the West, even as the model wins fans like X owner Elon Musk, who hopes to turn his social media network into a financial services platform.
Lee’s theory is that super apps are a better fit for the Asian internet, which initially lacked much of the digital infrastructure that underpins U.S. startups.
In the U.S., a new startup can rely on a plethora of other companies that provide supporting services. In Asia—even in wealthy countries like South Korea—those companies just don’t exist. That means a platform like Toss, or its more established Big Tech peers Naver and Kakao, had to build those services itself.
“When we launched our flagship money transfer service, it was loved by so many users, so we were able to grow very fast. We quickly realized that all the other vertical sectors of finance were not covered by other players,” he explains. “There has been a huge void in the Korea market, so we were able to capture those opportunities.”
Startup milestones
Viva Republica hit a key milestone last year, when it reported its first annual profit since its founding over a decade ago. The company reported a net profit of 21.3 billion Korean won ($15 million) for 2024, compared to a 216.6 billion won ($152 million) loss the year before. Revenue also jumped 43% to hit 1.96 trillion won ($1.4 billion).
Lee says the first-ever profit is due to a focus on growing revenue rather than building market share. “Unlike other fintech players, user growth doesn’t really correlate with revenue. Most of our revenue doesn’t come from users, but instead from our business customers,” attracted to Toss’s point-of-sale program, or its advertising opportunities.
“For the next three to five years, it’s going to mostly be a story around acquiring more business customers,” he says.
Viva Republica’s profit also came from strong growth in Toss Securities, the platform’s stock trading service. Lee notes its the only service that charges users a fee, and contributes about 20% of the platform’s total revenue.
He added that Toss Securities, after its launch in 2021, grew quickly due to the Toss superapp.
“It took Robinhood two years to get two million securities accounts,” Lee says. “We achieved that in five days.”
Toss has higher penetration among younger Koreans, with as many as 90% of those in their twenties using the platform. Lee says that while there aren’t a lot of differences between Toss’s younger and older users, one major divergence is that newer generations are more open to investing in foreign stocks, primarily in the U.S.
Now that Viva Republica has found a profitable business model, is the company on a path to a public debut, the next big milestone for a startup?
Lee says that Viva Republica plans to go public “in the near future,” but declined to give specific details on timing and location.
According to local media, Viva Republica is considering a U.S. IPO, abandoning plans to list in South Korea late last year. The company reportedly believes that Korean equity markets won’t properly value a fintech platform like Toss. (Lee declined to share details when pressed.)
Shares in competing fintech services KakaoBank and KakaoPay have lost around 70% and 80% of their value since their respective 2021 IPOs.
Market confidence
Korean equities often suffer from low valuations—sometimes dubbed the “Korea Discount”. Analysts blame the threat posed by nearby North Korea and poor corporate governance among the country’s chaebols, the massive conglomerates that dominate the economy. The country considered passing market reforms that would unlock value, similar to what was successfully pursued by its neighbor Japan.
Yet reforms have stalled due to a more pressing political crisis.
In December, then-President Yoon Suk Yeol tried to impose martial law. After widespread protests from the public and the opposition, Yoon withdrew his declaration just a few hours later.
Lawmakers quickly suspended and impeached Yoon, spurring months of political instability. Things are now starting to come to a close after the country’s Constitutional Court upheld Yoon’s impeachment, formally removing him from office—the second time a president has been removed in less than a decade. Korea will hold snap presidential elections in early June.
Still, Lee thinks the crisis shows South Korea’s strengths. “I’m gaining more confidence in the market,” he says. “Everything was done by the constitution, and the process was peaceful.”
“This is the tipping point where we really need to focus on economic growth, not only from businessmen, but from politicians as well,” Lee continues.
South Korea is grappling with disillusionment amongst the young, frustrated with high levels of debt, unaffordable housing, and more limited social mobility. That’s partly why many have turned to retail trading in stocks, or even more speculative assets like cryptocurrencies.
The East Asian country, a major exporter, is also frantically negotiating with the U.S. to alleviate tariffs imposed by President Donald Trump, including 25% auto tariffs and 26% “reciprocal tariffs.”
When asked whether uncertainty more broadly is affecting confidence among individual Koreans, Lee points to growth in Toss’s ads business last year as proof that the country’s economy is still strong.
And he remains bullish on South Korea as an attractive market for anyone that wants to get into fintech.
“Despite its limited population,” Lee says, “the Korean market is massive.”
The interview was conducted in collaboration with Fortune Korea.
President Donald Trump said he plans to be “very nice” to China in any trade talks and that tariffs will drop if the two countries can reach a deal, a sign he may be backing down from his tough stance on Beijing amid market volatility.
“It will come down substantially but it won’t be zero,” Trump said Tuesday in Washington, following earlier comments from Treasury Secretary Scott Bessent that the tariff standoff is unsustainable. Trump added that “we’re going to be very nice and they’re going to be very nice, and we’ll see what happens.”
Trump also said he didn’t see the need to say he’d “play hardball” with Chinese leader Xi Jinping and that during discussions he wouldn’t raise COVID-19, an issue that is very politically sensitive in Beijing. The White House recently launched a website that suggested the virus came from a lab in China, irking the nation’s diplomats.
Trump’s comments come as U.S. stocks and Treasuries have been battered since he rolled out sweeping tariffs on April 2, later announcing a 90-day reprieve for most nations. The 145% duties Trump placed on China this year remain in place, though he’s made exceptions for computers and popular consumer electronics.
“Trump is panicking due to the markets plummeting and still very high U.S. Treasury yields,” said Alicia Garcia Herrero, chief Asia Pacific economist at Natixis. “He needs a deal and quick. China does not need to offer anything big in such circumstances.”
China hasn’t officially responded to Trump’s pledge to play “nice” but the media outlet Cailian called it “a sign that Trump is already softening stance on his signature tariff policies.”
Beijing indicated earlier this month that it wants to see a number of steps from the Trump administration before agreeing to any discussions, especially reining in disparaging remarks by members of his cabinet.
Other conditions include a more consistent U.S. position and a willingness to address China’s concerns around American sanctions and Taiwan, according to a person familiar with the Chinese government’s thinking, who asked not to be identified.
Beijing also wants the U.S. to appoint a point person for talks who has the president’s support and can help prepare a deal that Trump Xi can sign when they meet, the person said.
Beijing had earlier expressed displeasure with comments Vice President JD Vance made about “Chinese peasants,” with one diplomat calling them “ignorant and disrespectful.”
Politics8 years ago