As federal agencies continue to make cuts, the Internal Revenue Service (IRS) is reportedly planning to shrink its workforce by tens of thousands of employees in the middle of tax season.
According to two anonymous sources who spoke with the Associated Press earlier this week, the IRS is preparing to cut as much as 50% of its 90,000-person workforce through layoffs, buyouts, and attrition or not replacing employees who leave. Up to 45,000 jobs could be at risk.
Sources told The New York Times that the IRS’s workforce reductions could hinder the agency’s ability to process millions of tax returns annually and conduct audits. For example, U.S. residents could face longer wait times for refunds.
It is unclear when the IRS will conduct the layoffs and which departments will be affected. IRS officials must submit a workforce reduction plan to the White House by March 13.
The cuts are part of President Donald Trump’s efforts to downsize the federal government through Elon Musk’s Department of Government Efficiency (DOGE). The Times reports that two DOGE representatives, Gavin Kliger and Sam Corcos, have been working from the IRS headquarters in Washington D.C. in recent weeks, and asking for access to agency databases.
The IRS has already begun reducing its workforce. In February, the agency laid off about 7,000 probationary workers with one year or less of experience on staff. The layoffs largely affected compliance department employees who ensured taxpayers filed their returns, followed the tax code, and paid their taxes.
Earlier this month, Bloomberg reported that between 4,000 and 5,000 IRS employees also accepted an incentivized resignation offer from President Donald Trump’s administration that allows them to resign and receive full pay and benefits until Sept. 30. Some IRS workers deemed critical to the tax filing season have to work until at least May 15, even if they have accepted the buyout.
Employees who resign through the buyout, along with those impacted by the layoffs, count towards the Trump administration’s goal of cutting the agency’s workforce in half, per The Times.
Another part of reducing the IRS workforce entails moving some IRS employees to the Department of Homeland Security to help with immigration enforcement. Department of Homeland Security Secretary Kristi Noem wrote in a letter to Treasury Secretary Scott Bessent on Feb. 7 that Homeland Security needed special agents from the IRS’ 2,100-person criminal investigation division to help apprehend and remove undocumented immigrants.
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Federal workforce cuts have also impacted other agencies. About 7,000 employees of the Social Security Administration, or 12% of its 57,000-member workforce, were let go last week while the Energy Department saw over 10% of its staff, or 1,800 employees, laid off last month.
There are about three million total federal employees.
