IRS Workforce Reduction Plan Sparks Concerns Over Agency Effectiveness and Diversity
The Internal Revenue Service (IRS) is reportedly drafting plans to significantly reduce its workforce by as much as 50%, according to two individuals familiar with the matter. This reduction would be achieved through a combination of layoffs, attrition, and incentivized buyouts. The anonymity of the sources was requested as they were not authorized to disclose the details of the plan. The layoffs are part of a broader effort by the Trump administration to shrink the federal workforce, spearheaded by Elon Musk’s Department of Government Efficiency. This initiative includes closing agencies, laying off probationary employees who have not yet gained civil service protection, and offering buyouts to federal employees through a “deferred resignation program” to quickly reduce the government workforce.
The IRS, which currently employs approximately 90,000 workers across the United States, plays a critical role in tax collection and enforcement. A reduction of tens of thousands of employees would render the agency “dysfunctional,” warns John Koskinen, a former IRS commissioner. The workforce reduction would not only impact the agency’s ability to collect taxes but also affect its diversity. People of color make up 56% of the IRS workforce, and women represent 65%, making the agency one of the more diverse federal employers.
Already, the IRS has taken steps to reduce its workforce. In February, roughly 7,000 probationary employees with less than a year of service were laid off. Additionally, the agency, along with other federal departments, offered buyouts to employees through the “deferred resignation program.” However, IRS employees involved in the 2025 tax season were informed that they would not be allowed to accept buyout offers until mid-May, after the taxpayer filing deadline. This temporary restriction highlights the importance of maintaining adequate staffing levels during critical periods, such as tax season, to ensure the agency can fulfill its core responsibilities.
The Trump administration’s plan to reduce the IRS workforce has drawn criticism from former IRS commissioners. In an opinion piece published in The New York Times, Koskinen and six other former commissioners argued that aggressive reductions in the agency’s resources would make the government less effective and less efficient in collecting taxes. They emphasized that the IRS is already understaffed and overburdened, and further cuts would exacerbate these challenges. The commissioners also warned that a weakened IRS would struggle to enforce tax laws, audit returns, and provide services to taxpayers, ultimately undermining the integrity of the U.S. tax system.
In addition to the planned layoffs, the Trump administration has proposed lending IRS workers to the Department of Homeland Security (DHS) to assist with immigration enforcement. In a letter sent in February, DHS Secretary Kristi Noem requested that Treasury Secretary Scott Bessent allow IRS employees to be borrowed for this purpose. This move has raised concerns about the further strain on the IRS workforce and the potential diversion of resources away from tax-related duties. The loaning of IRS employees to DHS could complicate the agency’s ability to manage its core responsibilities, particularly during peak periods like tax season.
The future of the IRS workforce reduction plan remains uncertain. A White House memo sent to federal agencies in late February required them to develop a report on their reduction in force plans by March 13. However, it is unclear whether the White House will approve the IRS’ reorganization plan or how quickly it will be implemented. Representatives for the White House, the Treasury Department, and the IRS did not respond to requests for comment, leaving many questions unanswered. The deliberations over the IRS workforce reduction plan highlight the ongoing challenges of balancing budget cuts with the need for effective governance and public services. As the situation continues to unfold, the potential impact on the IRS’ ability to function effectively and serve the American people remains a critical concern.
