IRS Reportedly Preparing for Significant Downsizing

Reports suggest the IRS may be on the brink of a historic downsizing, with plans currently being drafted to cut the agency’s workforce by up to half.

Key Takeaways

The IRS is reportedly creating plans to reduce its 90,000-strong workforce by up to 50% through various methods, including attrition and buyouts.
The potential layoffs are part of the Trump administration’s federal workforce reduction efforts, led by the Department of Government Efficiency.
Concerns have arisen from critics that such cuts could hamper the IRS’s efficiency and effectiveness, potentially impacting tax collection and government efficiency.
The Treasury has acknowledged that it’s eyeing changes for the IRS, but nothing has been approved yet.

IRS Workforce Reduction

AP sources suggest the IRS is planning a possible workforce reduction that could cut its workforce of 90,000 employees by up to half. Strategies for achieving this reduction include natural attrition, voluntary buyouts, and layoffs. These plans are reported as part of broader government efforts under the Trump administration to streamline federal operations, with leadership provided by the Department of Government Efficiency.

After these reports surfaced, Fox News Digital spoke to a Treasury spokesperson, who stated that, “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.” According to the spokesperson, nothing has been approved yet. However, changes made are aimed at “improving taxpayer customer service and ensuring a smooth and successful filing season.”

Concerns and Criticisms

Despite optimism expressed about the potential streamlining of government agency processes, not everyone is convinced. Former IRS Commissioner John Koskinen has voiced strong concerns regarding this reduction plan, warning that it could render the IRS “dysfunctional.” Koskinen and other former commissioners have previously cautioned against significant reductions, emphasizing that aggressive cuts in IRS resources could jeopardize the government’s effectiveness in tax collection, ultimately affecting public revenues.

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

Implications of Workforce Reallocation

The Trump administration is also reportedly looking at redeploying some IRS workers to support the Department of Homeland Security’s immigration enforcement efforts. A request by DHS Secretary Kristi Noem, seeking IRS employees’ assistance, was reportedly made in February.

The IRS has already cut around 7,000 probationary employees, and reports indicate that some employees have received buyout officers. AP News stated that employees active during the current tax season have been instructed not to take any offers until after the tax season ends.

This development comes during a time when federal agencies have been tasked with reporting reduction plans, although the timeframe for the IRS plan remains uncertain. Agencies are expected to have their reports prepared by March 13.