IRS Plans Massive Workforce Cuts Amid Trump Administration’s Federal Overhaul
The Internal Revenue Service (IRS) is preparing for sweeping workforce reductions, with plans to cut up to half of its employees through layoffs, attrition, and incentivized buyouts, according to two sources familiar with the matter.
The individuals, who spoke on condition of anonymity, said the layoffs align with the Trump administration’s broader effort to shrink the federal workforce through billionaire Elon Musk’s Department of Government Efficiency. The strategy includes closing agencies, terminating nearly all probationary employees lacking civil service protection, and offering buyouts through a "deferred resignation program" aimed at rapidly downsizing government operations.
Potential Impact on IRS Operations
A workforce reduction of this magnitude could leave the IRS “dysfunctional,” warned former IRS Commissioner John Koskinen.
The IRS currently employs approximately 90,000 workers nationwide, according to the latest agency data. The workforce is majority women (65%) and 56% people of color.
As part of the downsizing push, the IRS has already laid off around 7,000 probationary employees—those with less than one year of service—in February. Meanwhile, the “deferred resignation program” buyouts have been offered to IRS employees and nearly all other federal workers, though IRS employees working on the 2025 tax season were informed that buyout offers would not be available until mid-May, after the filing deadline.
IRS Workers to Be Transferred to Immigration Enforcement
Beyond layoffs, the Trump administration is redirecting IRS workers to assist with immigration enforcement. In a February letter, DHS Secretary Kristi Noem requested that Treasury Secretary Scott Bessent “loan” IRS employees to the Department of Homeland Security to help with an immigration crackdown.
Concerns Over the IRS' Future
Koskinen, along with six other former IRS commissioners, recently wrote in The New York Times:
“Aggressive reductions in the IRS’s resources will only render our government less effective and less efficient in collecting the taxes Congress has imposed.”
Awaiting White House Approval
According to a White House memo sent to federal agencies in late February, agencies were instructed to submit reduction-in-force plans by March 13. However, it remains unclear if the White House will approve the IRS reorganization plan or how long the implementation timeline will be.
Neither the White House, the Treasury Department, nor the IRS responded to requests for comment. The New York Times was the first to report on the internal discussions.
