A new report from the Treasury Inspector General for Tax Administration reveals that as of March 2025, 11,443 IRS employees were either approved to take the Trump administration’s first deferred resignation program offer or received termination notices during their probationary employment period.
As part of President Donald Trump’s actions to reduce the size of the federal government’s workforce, the Office of Personnel Management issued guidance for agencies to follow related to probationary employee firings and the DRP, which allowed federal employees to voluntarily resign with pay through Sept. 30, 2025.
TIGTA said its report, which was released on Monday, provides an update on the IRS’s efforts to reduce its workforce, as well as a snapshot of IRS business units impacted.
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According to IRS records, 4,128 employees were OK’d to accept the initial DRP offer in January, while 7,315 probationary employees received termination notices in February—representing an 11% reduction to the IRS workforce, which sat at approximately 103,000 employees as of February 2025, the report states.
In addition, the separations disproportionately impacted employees in certain positions, TIGTA said. For example, approximately 31% of revenue agents separated, while 5% of IT management left the agency.
The top six IRS business units impacted by the separations include:
- Human Capital Office: HCO supports IRS employees with human resources topics.
- Information Technology: IT supports IRS employees by delivering IT services and solutions.
- Large Business and International: LB&I helps corporations and partnerships with assets of more than $10 million to comply with tax laws, including emerging international issues.
- Small Business/Self Employed: SB/SE helps small business and self-employed taxpayers understand and meet their tax obligations.
- Tax Exempt & Government Entities: TE/GE helps taxpayers with pension plans, exempt organizations, and government entities to comply with the tax laws.
- Taxpayer Services: TS helps taxpayers understand and comply with the tax laws.
Reducing the IRS workforce has had nationwide implications, the report says. Every state, the District of Columbia, and Puerto Rico had probationary employees who received termination notices or accepted the DRP. Iowa, Colorado, Mississippi, and Idaho had the highest percentage of employee separations compared to the IRS workforce in those states.
Probationary employee findings
TIGTA found that 7,310 probationary employees received termination notices in February, and five received notices in early March. IRS emails and/or hard copy letters notified the employees that they were terminated for performance. At the time the probationary employees were issued termination notices, several senior IRS officials raised concerns that many of these employees didn’t have documented performance issues. TIGTA said it started a review to assess the allegations that these officials made.
Last March, a federal court ruled that the probationary employees needed to be reinstated. Impacted employees were eventually reinstated, but the IRS placed them on administrative leave. There have been court cases challenging the terminations and reinstatements, but it remains unclear if or when those workers will be able to return to their jobs.
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Most of the 7,315 probationary employees who received termination notices had less than one year of experience with the IRS.
- 6,669 employees had one year of service or less.
- 615 employees had between one and five years of services.
- 31 employees had more than five years of service.
Probationary employees who received termination notices tended to be under the age of 40. For example, 549 probationary employees were under 25 years old, which represented 14% of all IRS employees in that age group, the report states.
DRP applicant findings
According to the IRS, 4,128 employees have been approved for the DRP. There are 522 employees who applied but haven’t received final approval or are awaiting employee verification, the TIGTA report states.
As of March, more than half (54%) of employees who accepted the DRP were placed on administrative leave. One of the stipulations for the DRP, specific to the IRS, is that employees who accept the offer but work in “critical filing season positions” must work until at least May 15, 2025, before being placed on administrative leave. Managers also had the discretion to decide when an employee could be placed on administrative leave. Generally, all employees who accepted the DRP will be separated from the IRS as of Sept. 30, 2025, TIGTA noted.
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Approved DRP employees had varying years of experience, with 1,574 of them having 11 or more years of IRS service.
Nearly half (47%) of IRS employees whose deferred resignations have been approved were more than 55 years of age.
Last month, the Treasury Department gave IRS employees a second chance to take the DRP, which has been called “TDRP” or “DRP 2.0”. According to the IRS, more than 23,000 employees applied for the TDRP, and 13,124 were approved as of April 22, TIGTA said.
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The tax agency has also started a reduction to its workforce, which will include mass layoffs in two phases. The IRS workforce could be reduced to as little as 60,000 to 70,000 employees by year end, an internal memo stated—an estimate that includes workers who took both deferred resignation program offers.
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