IRS could cut up to half of its 90,000-person workforce: AP sources

WASHINGTON - The Internal Revenue Service (IRS) is preparing for massive workforce reductions, with up to 45,000 jobs at risk, according to two people familiar with the matter who spoke to The Associated Press on the condition of anonymity because they were not authorized to disclose the plans. 

The layoffs, voluntary buyouts, and attrition-based cuts are part of the Trump administration’s larger effort to downsize the federal government, spearheaded by Elon Musk’s Department of Government Efficiency (DOGE).

How will the layoffs happen?

What we know:

The IRS has already started reducing its workforce. In February 2025, the agency laid off roughly 7,000 probationary employees, most of whom had one year or less of service. Additionally, the IRS has launched a "deferred resignation program", offering buyouts to employees willing to leave voluntarily.

However, employees involved in the 2025 tax season have been barred from accepting buyouts until after the April tax filing deadline in mid-May.

Another significant aspect of the workforce reduction plan includes reassigning some IRS employees to the Department of Homeland Security (DHS) to assist with immigration enforcement. DHS Secretary Kristi Noem formally requested IRS personnel for this purpose in February 2025.

FILE - A sign for the Internal Revenue Service (IRS) is seen outside its building on February 13, 2025 in Washington, DC.  (Photo by Kayla Bartkowski/Getty Images)

What we don't know:

• The exact number of IRS positions that will be cut and over what period of time.
• Whether the White House will approve the final workforce reduction plan.
• How the cuts will impact tax collection, enforcement, and audits for taxpayers.

Could these cuts affect the IRS’s ability to function?

The other side:

Former IRS Commissioner John Koskinen and six other former commissioners have voiced strong opposition to the planned downsizing, warning that it could severely impact the agency’s ability to function. In a joint statement published in the New York Times, they argued that deep cuts to the IRS workforce would weaken tax enforcement, leading to reduced revenue collection and, ultimately, larger federal budget deficits.

Koskinen and his colleagues cautioned that shrinking the agency’s resources would hinder its ability to carry out essential duties, including processing tax returns, conducting audits, and ensuring compliance. 

"Aggressive reductions in the IRS’s resources will only render our government less effective and less efficient in collecting the taxes Congress has imposed," they wrote.

What's next:

IRS officials are required to submit a workforce reduction plan to the White House by March 13, 2025, as part of a broader federal downsizing initiative. However, it remains unclear whether the plan will be approved or how quickly it would be implemented.

If the plan is greenlit, tens of thousands of employees could face layoffs, buyouts, or reassignment in the coming months. Meanwhile, taxpayer services and enforcement efforts could be significantly impacted.