About 22,000 Internal Revenue Service employees have opted for the Trump administration’s latest “deferred resignation” program, according to various sources. This wave of departures, along with prior resignations and layoffs, could considerably impact the agency’s tax collection capabilities amid significant staffing cuts.
The IRS had approximately 100,000 employees at the start of President Trump’s current term in January. Since that time, around 5,000 employees have resigned, and another 7,000 probationary employees were laid off, though these dismissals have been challenged in court. If all reductions proceed, the agency could see a loss of nearly one-third of its workforce within the year.
The deferred resignation offer allows employees who accept it to remain on paid administrative leave until September before officially leaving their federal positions. Some employees retain the option to withdraw their resignations.
According to the Federal News Network, the IRS aims to cut its workforce by up to 40%, potentially reducing its total staffing to between 60,000 and 70,000 employees. An internal memo has detailed plans for this extensive reduction.
The reduction will occur in two phases, initially targeting departments such as the Taxpayer Experience Office, Transformation Strategy Office, Online Services Office, and Office of Civil Rights. The second phase will further impact the taxpayer services and compliance divisions.
These staffing changes follow the conclusion of the 2025 tax filing season. The timing of the announcement, coinciding with the April 15 tax deadline, has sparked concerns among experts about the IRS’s ability to process returns and collect taxes effectively.
The layoffs and buyouts are part of a larger initiative by the Trump administration to downsize the federal government. While the White House anticipated about 10% of eligible federal workers would accept resignation offers, the response at the IRS has been notably higher.
A Treasury Department spokesperson stated that the number of IRS employees leaving under Trump is “approximately the same” as those added during the Biden administration, citing the reduction of “wasteful Biden-era hiring surges” and consolidation of functions as crucial for improving efficiency and service quality.
“These staffing reductions are part of larger process improvements and tech innovations that will allow the IRS to operate more effectively and serve the public more efficiently,” the Treasury spokesperson said.
Fiscal watchdog groups caution that the swift workforce reduction could impair the IRS’s ability to manage tax returns and revenue collection, potentially leading to significant federal income shortfalls. Some experts warn that decreased enforcement could cost the Treasury hundreds of billions in tax receipts.
The IRS has also seen leadership changes, with acting IRS commissioner Melanie Krause resigning in March after two months in the role. Other senior officials, including the chief financial officer, privacy officer, risk officer, and chief of staff, have also departed recently.
The workforce reductions are coordinated with the Department of Government Efficiency, led by tech billionaire Elon Musk, focusing on reducing the federal bureaucracy’s cost and size across multiple agencies.
Federal employees receiving reduction-in-force notices must be given at least 60 days’ notice before termination. As of mid-April, reports show only one IRS office had received such notices, indicating the plan’s full implementation is in early stages.
Alongside personnel changes, the IRS is navigating potential disruptions from other projects, including a cryptocurrency initiative that could affect modernization efforts. These elements contribute to a significant transitional period for this crucial revenue-generating agency.
The immediate and long-term effects of these workforce changes on tax collection, enforcement, and taxpayer services remain uncertain as the IRS undergoes this substantial organizational transformation.
