Report: IRS Considering Cutting Half of 90,000 Employees

WASHINGTON — According to two sources with knowledge of the matter, the IRS is in the process of developing a plan to reduce its staff by up to 50% by combining layoffs, natural attrition, and incentivized buyouts.

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

These layoffs are a component of the Trump administration’s strategy to downsize the federal workforce using Elon Musk’s Department of Government Efficiency. This involves shutting down agencies, dismissing almost all probationary staff who have yet to gain civil service protection, and offering buyouts to nearly all federal employees through a program known as “deferred resignation” to swiftly decrease government personnel.

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

The IRS currently has about 90,000 employees nationwide, as indicated by the most recent IRS figures. Among them, 56% are individuals of color, while women make up 65% of the IRS workforce.

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.

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.