On June 9th 2026 the Treasury Inspector General For Tax Administration (TIGTA) issued it's latest findings on the state of the IRS workforce following the job cuts instituted since the third week of January 2025. All told, the IRS has taken a net cut of 28,000 personnel (after factoring in the 2,000 hires that have occurred so far in 2026) or 28% of its late 2024 workforce. Interestingly, this puts the IRS at roughly the same size it was in the 2019-2021 time period. However, the cuts fell much more heavily on certain areas of the IRS than others. 

In fact, by far the greatest numbers of cuts (over two thirds) were made to IRS tax support services and the parts of the IRS meant to assist businesses and other organizations. For instance, almost half of those cuts were directed specifically at removing personnel otherwise assigned toward helping businesses comply with tax laws (including international tax reporting connected to forms W-8/1042-S). We previously discussed some of these implications in a February blog post, but it bears repeating that this has a disproportionately negative impact on Accounts Payable and Tax Departments. That is for three reasons.

First, there is next to no chance of any 1099 or other tax questions you may have being answered by the IRS. Second, regulation writing is not happening on a timely basis toward clarifying the scope and form of the huge changes in W-9/1099 compliance and reporting laws that took place in the past year. Third, a much smaller percentage of the workforce cuts were made to auditors. That means, relatively speaking, Accounts Payable and Tax Departments are facing a higher rate of changes to W-9/1099 compliance and filing, with far fewer IRS support personnel to assist in defining these changes, all while the number of auditors remains disproportionately higher. 

The biggest problem with all of the above is that many companies are proceeding as if their liability risks are lower, when in fact they are similar to what was faced in prior years. On top of that, organizations are compounding their problems by turning to fundamentally inaccurate sources of tax guidance like AI (which is riddled with errors and is explicitly regarded by auditors as not capable of providing IRC Section 6724 reasonable cause backing for reporting decisions). The takeaway is that you must proceed with caution in the months to come, and as our attention turns once more toward Year-End prep and filing concerns.