The New York Times, Bloomberg Tax, and the Associated Press reported on March 4 that at the behest of the White House, the IRS is drafting plans to cut its staff by as much as 50% as the Trump administration continues its mission to shrink the size of the federal workforce.
According to the published reports, the IRS workforce will be slashed through a mix of layoffs, attrition, and incentivized buyouts.
The number of IRS employees stood at roughly 100,000 before President Donald Trump took office on Jan. 20, as the tax agency refilled its ranks the last couple of years through funding from the Inflation Reduction Act of 2022. However, the IRS workforce has shrunk by several thousand in the past few weeks. An estimated 6,700 IRS workers—mostly newer “probationary” employees who have fewer protections than long-term workers—were laid off on Feb. 20. In addition, between 4% and 5% of IRS workers accepted the Trump administration’s federal employee buyout offer last month, Bloomberg Tax reported. But workers considered essential to tax season were told they have to stick around through the April 15 tax filing deadline until sometime in May.
The Trump administration hopes to achieve the 50% reductions at the IRS by the end of the year, according to Bloomberg Tax. One poster on Reddit wrote recently that another wave of terminations could begin after May 15 once the April 15 filing deadline has passed, according to information from a senior leadership meeting.
“Anyone with less than three years at the IRS will be a target of the next round,” this person wrote. “If you were deemed essential and not terminated this round I would still be looking for a new job. They plan to use us and dump us. We owe them no loyalty at this point.”
Another poster on Reddit wrote that IRS Chief Human Capital Officer Traci DiMartini was dismissed on March 5.
“IRS Deputy Chief HCO is now acting. Announced at 12 p.m. Eastern today in a Human Capital Office Town Hall. No details provided other than she is no longer with the organization,” this person said.
Billionaire Elon Musk, who has been heading up the Department of Government Efficiency, was tasked by President Trump to cut costs and pare down the federal workforce. The administration is doing this by closing agencies, laying off nearly all probationary employees who haven’t yet gained civil service protection, and offering buyouts to almost all federal employees through the “deferred resignation program.”
In addition to the planned layoffs, the Trump administration intends to lend IRS agents to the Department of Homeland Security to assist with immigration enforcement. In a letter sent in February, DHS Secretary Kristi Noem asked Treasury Secretary Scott Bessent to borrow IRS workers to help with ongoing immigration crackdown efforts.
Reacting to the news of the IRS’s workforce possibly being halved, Ron Abraham, partner at top 200 accounting firm KSDT CPAs, wrote on LinkedIn, “Imagine calling the IRS and actually getting through to a human … now imagine that possibility getting even worse. With half the workforce gone, good luck getting a response to a notice, resolving an issue, or even getting basic questions answered. Refund delays? Expect them. Audits? More computer-driven and less human oversight. The IRS has already struggled with service levels in recent years—this could take things from frustrating to impossible. And let’s not forget tax professionals who rely on IRS agents to process filings, clear up errors, and provide guidance. If getting answers was hard before, this could make it a nightmare.”
“Embrace for impact if this is true,” he concluded.
Charles Rettig, who served as chief of the IRS during the first Trump administration, wrote on LinkedIn March 4 that while a reduction in force at the tax agency may be a foregone conclusion at this point, how it’s implemented can have a significant impact on millions of Americans in the coming months and years.
“Those who disparage the IRS often fail to comprehend that the expenses of operating our country don’t disappear if the IRS suffers, and that a disabled, underfunded IRS significantly benefits unidentified, noncompliant taxpayers at the direct expense of compliant taxpayers,” he wrote. “Above the entrance to IRS headquarters is this quote from former Supreme Court Justice Oliver Wendell Holmes Jr.: ‘Taxes are what we pay for a civilized society.’ Having a general understanding of issues facing taxpayers, many of us proudly joined the IRS to help improve our system of tax administration.”
Rettig was one of seven former IRS commissioners who wrote a guest essay recently for the New York Times, which said, in part, that aggressive reductions in the IRS’s resources “will only render our government less effective and less efficient in collecting the taxes Congress has imposed.”
“It will shift the burden of funding the government from people who shirk their taxes to the honest people who pay them, and it will impede efforts by the IRS to modernize customer service and simplify the tax filing process for everyone,” the former IRS commissioners wrote.
They concluded their opinion piece by writing: “Nearly 200 million Americans are in the process of completing their tax returns. We urge caution in initiating major changes to IRS operations during the filing season. But even after filing season ends, we believe—and we believe that successful chief executives across the country would concur—that making drastic cuts to accounts receivable as a way to improve cost efficiency just doesn’t add up.”
All of this is happening while the IRS doesn’t have a current full-time commissioner. Billy Long, a Republican congressman from Missouri from 2011 until 2023, was nominated by President Trump to be the next IRS commissioner; however, the Senate has yet to schedule confirmation hearings for Long. Douglas O’Donnell had been serving as acting chief, following Danny Werfel’s resignation as commissioner on Jan. 20, but he retired on Feb. 28. IRS Chief Operating Officer Melanie Krause took over as the agency’s acting commissioner following O’Donnell’s retirement.
With Tribune News Service
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Tags: IRS, IRS layoffs, Payroll
Frog Blast the Vent Core March 5 2025 at 10:00 pm
DOGE is a bad bad dog and should be put down 💉