IRS Preparing To Cut as Much as Half Its Workforce, AP Reports

The IRS is reportedly drafting plans to slash as much as half of its 90,000-person workforce, raising questions about tax collection efficiency while current employees process this year’s returns.

Key Insights

The potential IRS workforce reduction is part of the Trump administration’s broader effort to shrink federal agencies, led by Elon Musk’s Department of Government Efficiency.
Former IRS Commissioner John Koskinen and six other former commissioners argue that such massive cuts would render the agency “dysfunctional.”
Approximately 7,000 probationary employees were already laid off in February, with 6,000 more expected during tax season.
The administration may reportedly reassign some IRS employees to assist the Department of Homeland Security with immigration enforcement efforts.
Federal agencies must report their reduction plans by March 13, though the timeline for implementing the IRS plan remains uncertain.

IRS Workforce Reduction Reportedly Planned

AP recently reported that according to unnamed sources familiar with the situation, the Internal Revenue Service is preparing plans to reduce its workforce by up to 50%.. This unprecedented reduction would affect tens of thousands of the agency’s 90,000 employees through a combination of layoffs, attrition, and incentivized buyouts. This is reportedly a part of the Trump administration’s broader effort to reduce the size of the federal government, with the IRS becoming a primary target for substantial workforce reductions. The planning comes as the agency is actively processing this year’s tax returns.

The cuts are reportedly being driven by the Department of Government Efficiency (DOGE), headed by Elon Musk, which has been tasked with identifying areas for reducing federal spending and streamlining government operations. The workforce reduction strategy appears to be moving forward rapidly, with approximately 7,000 probationary IRS employees already laid off in February. These employees lacked civil service protections, making them vulnerable to early termination.AP reported that some employees were also offered “deferred resignation program” buyouts, but those involved in tax season were told they couldn’t accept any offers until after the tax season was over.

Fox News Digital spoke to a Treasury spokesperson, who did not confirm or deny the recent reports but said, “In line with the Trump administration’s focus on efficiency and deficit reduction, the Treasury Department is considering a wide range of possible streamlining initiatives.” The spokesperson noted that no plan has been approved yet, but changes will be aimed at “ensuring a smooth and successful filing season.”

BREAKING: The IRS is drafting plans to cut as much as half of its 90,000-person workforce, AP sources say. https://t.co/GXuSJrSy9s

— The Associated Press (@AP) March 4, 2025

Expert Warnings and Operational Concerns

Former IRS Commissioner John Koskinen has expressed concerns about the potential impact of such drastic cuts. Cutting so many employees from the service would make it ‘dysfunctional,'” Koskinen argued. His concerns align with six other former IRS Commissioners who previously asserted that “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.”

IRS employees involved in processing the current tax season reportedly cannot accept buyout offers until after the tax filing deadline in mid-May. To expedite workforce reductions, the agency may implement what Koskinen described as a “deferred resignation program” to offer buyouts and reduce staff numbers quickly.

Redeployment to Immigration Enforcement

The Trump administration also reportedly developed plans to lend some IRS workers to the Department of Homeland Security to assist with immigration enforcement. A February letter from DHS Secretary Kristi Noem specifically requested IRS workers to support immigration efforts, signaling a significant shift in priorities and resource allocation across federal agencies. This development represents an unprecedented reassignment of tax collection personnel to border security functions.

Federal agencies are required to report their reduction plans by March 13, according to administration directives, though the timeline for implementing the IRS plan remains unclear. With tax season in full swing and major organizational changes looming, both taxpayers and IRS employees face an uncertain period as the administration pursues its federal workforce reduction goals.