Thousands of IRS Employees Face Job Losses Under Trump Administration
In a move to curb costs, the Trump administration’s ongoing efforts have set the stage for thousands of IRS employees on probationary status to face potential job cuts. The implications of these layoffs on the tax filing season, which commenced on January 27, 2025, remain uncertain. These job cuts follow previous reductions in IRS personnel and budgetary allocations.
Cuts on the Horizon
Recent reports suggest that the IRS plans to dismiss thousands of probationary employees. A significant portion of these cuts, expected to affect at least 3,500 IRS employees in the Small Business/Self-Employed (SB/SE) division, looms on the horizon. This division, helmed by Lia Colbert, provides services to over 57 million small business owners and self-employed taxpayers with assets below $10 million. Employees in departments such as exam (audit), collections, operations support, and fraud enforcement within the SB/SE division could potentially face layoffs.
The employees most vulnerable to these cuts are those on probationary status, including new hires and individuals recently moved or promoted within the organization.
Future Reductions and Concerns
Anticipated additional cuts beyond the SB/SE division could potentially affect up to 15,000 IRS employees, according to ABC News sources. Reports indicate that employees in Atlanta and Kansas City are bracing for possible job losses, with the latter expecting upwards of 1,000 layoffs this week.
The Impact of Previous Reductions
Earlier this year, the IRS recalled workers who had voluntarily agreed to resign from their positions early. The Office of Personnel Management extended an offer to over two million federal workers to resign and remain on payroll until September 30, 2025, during the fiscal year. The Deferred Resignation Program (DRP) offer was made available until February 6, excluding specific critical personnel essential for the tax filing season. Critical filing season positions have been exempt from the DRP until May 15, 2025, with employees in Taxpayer Services, Information Technology, and the Taxpayer Advocate Service falling under this exemption.
Impact on Hiring Freeze
President Trump’s executive order placed a freeze on hiring for most federal agencies, with the exception of the IRS. The directive mandates a plan to reduce the government workforce within 90 days, keeping the freeze intact until the Treasury Secretary deems it necessary to lift it. Trump’s remarks about potential terminations or reassignments of IRS employees to the border have caused concerns among the workforce.
Challenges and Future Directions
The IRS’s workforce has faced heightened scrutiny, with hiring levels rising due to the Inflation Reduction Act funding. Republicans have since rolled back a significant portion of these funds, prolonging the uncertainty for IRS employees.
Elon Musk’s Department of Government Efficiency has sought access to the IRS’s Integrated Data Retrieval System, raising concerns about potential privacy breaches and disruptions during tax filing season.
Conclusion
The ongoing changes within the IRS workforce underscore the evolving landscape of federal agencies under the current administration. The potential job losses, funding adjustments, and access to sensitive taxpayer data highlight the challenges faced by the IRS and its employees during a critical period for tax compliance. As uncertainties persist, stakeholders await further developments in the IRS’s workforce management and operational strategies.