IRS to Reduce Workforce by Nearly 7,000 Employees Starting Thursday

IRS Announces Significant Staff Reductions Amid Ongoing Changes

The Internal Revenue Service (IRS) is preparing to significantly reduce its workforce, with plans to lay off approximately 7,000 probationary employees starting Thursday. This announcement comes amid broader efforts to streamline government operations.

Reports indicate that the layoffs will target employees who have served in their positions for one year or less, thus lacking full civil service protections. According to the Associated Press, a source familiar with these developments confirmed the plans.

Reuters has also corroborated this information, revealing that about 6,700 employees, representing around 7 percent of the IRS’s total workforce of roughly 95,000, are expected to be affected. These layoffs will span across all 50 states, Puerto Rico, and Washington, D.C.

Impact on IRS Operations

The impending layoffs will impact various positions within the agency, including revenue agents, specialized auditors, and IT specialists. Industry analysts are concerned about how these reductions might affect the IRS’s ability to collect taxes effectively, especially as the agency anticipates processing over 140 million tax returns this year.

Despite these cuts, some probationary employees deemed essential for processing tax returns will be retained. This includes positions that support and advocate for taxpayers, indicating that the IRS is attempting to maintain core functions despite the workforce reductions.

Compliance Department Faces Major Cuts

Insider sources noted that the workforce reductions will heavily impact the compliance department, responsible for ensuring that taxpayers meet their obligations, including timely filing and payments by the April 15 deadline. The corporation’s capacity to enforce compliance may become strained as a result of these significant cuts.

IRS’s Response and Future Directions

Currently, the IRS has not publicly confirmed the reported layoff plans. Fox News Digital reached out for comments but did not receive an immediate response from either the IRS or the Department of Treasury.

The decision to proceed with layoffs among probationary federal employees stems from the Trump administration’s strategy to enhance government efficiency and eliminate perceived wastefulness in federal spending. This initiative falls under the purview of the Department of Government Efficiency, which aims to trim the federal workforce significantly.

Context of Workforce Reductions

This announcement of layoffs comes on the heels of President Donald Trump’s statement made on January 29, which emphasized that federal employees must return to in-person work by early February or face termination. Such measures reflect a stringent approach toward workforce management within federal agencies.

Recently, IRS employees involved in the upcoming tax season were informed that they could not accept buyout offers until mid-May, following the taxpayer filing deadline. This restriction has led to further speculation about the agency’s operational stability amidst staff reductions.

Contrasting Policies with Recent Administration

These workforce cuts serve to partially reverse the initiatives outlined in the Biden administration’s Inflation Reduction Act, which allocated $80 billion to hire 87,000 new IRS agents. According to a September 2023 report from the House Oversight Committee, these new hires were mandated to focus on ensuring that wealthy Americans contribute their fair share of taxes.

However, critics argue that these measures primarily target middle-class Americans. In contrast, the Biden administration maintains that increased staffing would help boost the IRS’s enforcement capabilities against higher-income tax evaders.

Recent Improvements in IRS Services

Despite the impending layoffs, the IRS has reported improvements in service performance and reduced phone wait times in recent filing seasons. IRS Commissioner Danny Werfel acknowledged these advancements in a statement issued in January, claiming that they marked a historic period of improvement.

Werfel stated, “These taxpayer-focused improvements we’ve done so far are important, but they are just the beginning of what the IRS needs to do. More can be done with continued investment in the nation’s tax system.” This highlights the agency’s commitment to enhancing its efficacy and service delivery, even amidst workforce reductions.

Looking Ahead: Challenges for the IRS

As the IRS moves forward with these layoffs, questions about the agency’s ability to manage its key responsibilities loom large. The balance between cutting costs and maintaining effective tax collection and compliance will be a critical challenge in the coming months.

The landscape of the IRS is indeed changing, as leadership navigates federal mandates and the complex environment of taxpayer needs. The outcome of these workforce reductions may have lasting implications for the agency’s operations and service to the public.

Contributions from Fox News’ Alexandra Koch and the Associated Press were integral in the development of this report.