IRS Contract Purge Threatens Taxpayer Services, Watchdog Says

The IRS’s decision to cancel some of its contracts—which potentially saved the agency $645 million—could endanger its ability to assist taxpayers, an agency watchdog said.

Almost 30% of the contracts the IRS identified for possible cancellation related to taxpayer-facing services, like updates to tax filing systems. As of July 2025, the IRS decided to cancel 115 of the 146 taxpayer-facing contracts it identified, while the rest were narrowed, ended, suspended, or retained, according to a Treasury Inspector General for Tax Administration Monday report.

“Cancelling taxpayer-facing contracts may create service gaps, delay assistance, and require the IRS to ...