IRS workforce reduction: up to 45,000 jobs at risk amid federal cuts

The IRS seeks to cut up to half of its workforce, which could affect as many as 45,000 people.

As part of ongoing federal budget reductions, the Internal Revenue Service (IRS) is reportedly preparing to cut up to 50% of its workforce, which could significantly impact tax return processing and audits during the peak 2025 tax season.

Massive Workforce Cuts on the Horizon

According to anonymous sources cited by the Associated Press, the IRS could lose up to 45,000 employees through:

✔ Layoffs

✔ Buyout packages

✔ Attrition (not replacing departing employees)

The agency currently employs around 90,000 workers, and the potential mass reduction could hinder tax processing, leading to longer wait times for refunds and a weakened audit system.

Trump Administration’s Government Downsizing Effort

The cuts align with President Donald Trump’s push to shrink federal agencies as part of his government efficiency initiative, led by Elon Musk’s Department of Government Efficiency (DOGE).

Reports from The New York Times indicate that DOGE representatives Gavin Kliger and Sam Corcos have been working from the IRS headquarters in Washington, D.C., requesting access to agency databases to plan the reductions.

IRS officials are required to submit a workforce reduction plan to the White House by March 13.

Recent IRS Layoffs and Buyouts

The IRS has already started downsizing in early 2025, with:

📉 7,000 probationary workers laid off in February (employees with less than a year of experience).

📉 4,000-5,000 employees accepting an incentivized resignation offer, allowing them to resign while receiving full pay and benefits until September 30, 2025.

Critical staff required for the tax filing season must continue working until at least May 15, even if they accepted a buyout package.

Potential Impact on Taxpayers

The IRS workforce reduction could have major consequences, including:

❌ Delays in processing tax returns

❌ Longer wait times for refunds

❌ Reduced audit enforcement

❌ Weakened taxpayer assistance services

With the March 13 deadline approaching, more details on the IRS restructuring plan are expected soon. However, concerns remain about the potential strain on an already burdened tax system during the critical tax season.