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The IRS, acting under direction from the Trump administration, will cut from 30% to 40% of its workforce, according to an internal memo seen by CBS News and the Federal News Network. The agency has plans to go from 102,000 employees to a target of 60,000 to 70,000, the memo said.
The layoffs will come in two phases, the memo said. The first will make “high” numbers of cuts to “core functions” such as the online services office, taxpayer experience office, transformation strategy office, and office of civil rights. The second phase, which will take place in August, will “consolidate” many functions and make “high” numbers of cuts to taxpayer services and compliance. Cuts to career executive jobs will take place between the two phases.
The reduction in force is well underway. More than 20,000 IRS employees have taken the deferred resignation offer, the New York Times and Bloomberg Tax reported. They’ll be off the job as early as April 28.
IRS leadership, too, has been leaving in droves. Three agency heads have stepped down since President Donald Trump’s inauguration. Most recently, Acting Commissioner Melanie Krause accepted deferred resignation after being sidestepped on a deal between the Treasury Department and the Department of Homeland Security that gave ICE access to undocumented immigrants’ data. The IRS’s CFO, chief risk officer, chief privacy officer, and chief information officer have also resigned or plan to.
IRS ROI: The IRS increased in size by about 26,000 employees under President Joe Biden’s tenure. It employed around 75,700 people in full-time equivalent positions in 2020, and hired many new staffers with $78.9 billion in funding it received through the Inflation Reduction Act. (Congressional Republicans rescinded $40 billion of that money.) The reduction in force would reverse those changes and then some.
An unnamed spokesperson for the Treasury wrote, regarding the reduction in force, that “the roll back of wasteful Biden-era hiring surges, and consolidation of critical support functions are vital to improve both efficiency and quality of service.”
National Taxpayer Advocate Erin Collins, however, argued in her annual report to Congress that the Biden-era hires made the agency more effective. In fiscal year 2024, she pointed out, the IRS answered 9 million more phone calls than it did in 2022, halved wait times on calls, and halved the time it took to respond to taxpayer correspondence. That year, Collins said, the IRS collected $5.1 trillion in revenue on a $12.3 billion budget, what she called “a remarkable return on investment of 415:1.”