February 21, 2025 09:00 AM PST
(PenniesToSave.com) – The Biden administration’s expansive government programs and spending have put a significant strain on taxpayers. In response, Donald Trump has proposed a bold move to rein in government excess: the creation of the Department of Government Efficiency (DOGE) and significant cuts to the Internal Revenue Service (IRS). While these changes aim to reduce bureaucracy and save taxpayer dollars, many Americans are left wondering what it means for their taxes this year—and whether they should consider filing an extension.
What Is the Department of Government Efficiency (DOGE)?
The Department of Government Efficiency (DOGE) is designed to streamline government operations, cut wasteful spending, and make federal agencies more accountable. By taking a hard look at bloated budgets and redundant programs, DOGE aims to improve transparency and reduce the financial burden on American households. One of its first targets: the IRS.
DOGE will operate as a watchdog, reviewing the spending practices of federal agencies and recommending cuts or restructuring where inefficiencies are found. The department’s mandate includes evaluating whether taxpayer dollars are being utilized effectively, eliminating duplicative programs, and promoting fiscal responsibility. The broader objective is to shift the government’s focus from excessive oversight and administrative bloat to delivering real value to American taxpayers.
Under Trump’s plan, DOGE will assess the IRS’s budget, staffing, and operations. The goal is to shift the agency’s focus from heavy-handed enforcement to efficient taxpayer services, ensuring that the IRS prioritizes helping citizens over penalizing them. This shift could reduce the anxiety many Americans feel when dealing with the IRS and create a more supportive, customer-service-oriented approach to tax collection.
Trump’s Proposed Cuts to the IRS
Trump’s proposed cuts to the IRS are substantial. The plan includes slashing the agency’s budget by up to 20%, reducing staffing levels, and redirecting resources away from aggressive auditing practices. Instead of focusing on small businesses and middle-class families, the IRS would prioritize high-dollar tax evasion cases, maximizing efficiency without unnecessary overreach.
For the average American, this could mean fewer headaches during tax season. Fewer audits and a reduced focus on minor filing errors may provide peace of mind to millions of taxpayers. However, the cuts could also slow down processing times for tax returns and refunds, as the IRS adapts to leaner operations.
Critics of the cuts argue that a reduced IRS workforce could lead to delays not only in processing tax returns but also in customer service responsiveness. The IRS handles millions of inquiries each year, and fewer agents could mean longer wait times for assistance and potential challenges in resolving disputes. On the flip side, supporters believe these changes will force the IRS to adopt more digital and self-service solutions, improving efficiency over time.
How This Affects Your 2025 Tax Filing
The big question on many minds is whether to file taxes early or consider filing an extension this year. Filing early might secure your place in the queue before potential backlogs develop. However, filing an extension could offer more flexibility if IRS processing slows down due to reduced staffing.
For those expecting a refund, early filing may still be the best bet to avoid delays. However, if you owe taxes or need more time to accurately prepare your return, an extension could provide breathing room without immediate financial impact. Just remember: an extension to file is not an extension to pay, so estimating your owed taxes is still crucial.
Additionally, taxpayers who rely on IRS assistance or expect to navigate complex tax scenarios (e.g., business deductions, capital gains, or recent life changes) might find the reduced IRS support challenging. In these cases, seeking professional tax advice early in the season could help avoid issues and streamline the filing process.
Final Thoughts
The Department of Government Efficiency and Trump’s proposed IRS cuts are part of a broader push to reduce government overreach and save taxpayer money. While these changes may bring benefits like fewer audits and a leaner, more efficient IRS, they also introduce new variables into tax planning this year.
For most taxpayers, staying informed and considering your specific financial situation will be key. Whether you choose to file early or request an extension, having a solid strategy can help you navigate this changing landscape with confidence. Consulting with tax professionals or using reputable tax software could also help mitigate risks associated with the shifting IRS landscape.