What does a labor fight in Washington have to do with the refund many families track each spring? Potentially quite a bit. The Treasury Department has ended collective bargaining agreements for unionized workers at the IRS and the Bureau of the Fiscal Service.
That matters because the IRS expects about 164 million individual returns this year by April 15, 2026, and the Fiscal Service says it disburses funds to millions of Americans.
Why this matters now
The timing is the real story. For most readers, this is not just an inside-the-Beltway fight over workplace rules. It is happening while taxpayers are filing returns, checking bank apps for refunds, and dealing with the usual paperwork that comes with spring.
The IRS still says April 15 is the deadline for 2025 returns and that electronically filed Form 1040 returns are generally processed within 21 days.
Treasury’s move follows President Donald Trump’s March 27, 2025 executive order excluding the Treasury Department, except for the Bureau of Engraving and Printing, from federal labor-management relations programs on national security grounds.
Then, on February 12, revised February 17, 2026, OPM Director Scott Kupor told covered agencies to terminate or modify applicable collective bargaining agreements and report their status to OPM each month until the notices were executed. In practical terms, this was not a one-off move at the IRS. It was the next step in a broader administration policy.
The legal fight is still alive
Treasury told IRS employees the change would strengthen the agency as “one IRS” focused on taxpayers.
The National Treasury Employees Union pushed back just as hard, saying the IRS cannot “unilaterally end” its contract. NTEU says it represents about 150,000 employees in 37 federal agencies and departments, which gives this clash weight far beyond one bureau or one office floor.
There is also a court battle moving in parallel. On February 26, a Ninth Circuit panel vacated a preliminary injunction against Trump’s executive order, clearing the way, for now, for the administration to move ahead while the larger legal fight continues.
So yes, this is about labor law. But it is also about the machinery behind tax returns, refunds, and government payments staying steady when the public is watching closest.
The official memorandum was published on OPM.
