IRS Is Drafting Plans to Cut as Much as Half of Its 90,000-Person Workforce, AP Sources Say

By Associated Press

Published 3 months ago on

March 4, 2025

The IRS faces potential workforce cuts of up to 50%, raising concerns about the agency's ability to function effectively. (AP File)

Trump administration plans to drastically reduce IRS workforce through layoffs, attrition, and buyouts, potentially affecting 45,000 employees.
Former IRS commissioner warns that such significant staff reductions would render the agency 'dysfunctional' in its tax collection duties.
White House memo requires agencies to submit reduction in force plans by March 13, with IRS reorganization approval pending.

WASHINGTON — The IRS is drafting plans to cut its workforce by as much as half through a mix of layoffs, attrition and incentivized buyouts, according to two people familiar with the situation.

The people spoke on condition of anonymity because they weren’t authorized to disclose the plans.

The layoffs are part of the Trump administration’s efforts to shrink the size of the federal workforce through billionaire Elon Musk’s Department of Government Efficiency by closing agencies, laying off nearly all probationary employees who have not yet gained civil service protection and offering buyouts to almost all federal employees through a “deferred resignation program” to quickly reduce the government workforce.

A reduction in force of tens of thousands of employees would render the IRS “dysfunctional,” said John Koskinen, a former IRS commissioner.

The federal tax collector employs roughly 90,000 workers total across the United States, according to the latest IRS data. People of color make up 56% of the IRS workforce, and women represent 65%.

Recent Layoffs and Buyout Offers

Already, roughly 7,000 probationary IRS employees with roughly one year or less of service were laid off from the organization in February.

The organization also offered IRS employees — along with almost all federal employees across the government — “deferred resignation program” buyouts, though IRS employees involved in the 2025 tax season were told earlier this month that they would not be allowed to accept a buyout offer from the Trump administration until mid-May, after the taxpayer filing deadline.

Potential Reassignment to DHS

In addition to the planned layoffs, the Trump administration intends to lend IRS workers 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.

Koskinen and six other former IRS Commissioners wrote in the New York Times earlier this month: “Aggressive reductions in the I.R.S.’s resources will only render our government less effective and less efficient in collecting the taxes Congress has imposed.”

According to a White House memo sent to federal agencies in late February, agencies are to develop a report by March 13 on its reduction in force plans — but it is unclear whether the White House will approve the IRS’ reorganization plan and over what period of time it would be implemented.

Representatives for the White House, the Treasury Department and IRS did not respond to an Associated Press request for comment. The New York Times first reported the deliberations.