Approximately 22,000 Internal Revenue Service employees have opted for the Trump administration’s “deferred resignation” offer, according to multiple sources knowledgeable about the situation. This departure, along with previous resignations and layoffs, could considerably weaken the agency’s tax collection capabilities as it undergoes substantial workforce reductions.
When President Trump started his current term in January, the IRS employed about 100,000 people. Since then, around 5,000 employees have resigned, and an additional 7,000 probationary employees were laid off, although these layoffs have been challenged in court. If all workforce reductions are implemented, the agency would see a reduction of nearly one-third of its staff this year alone.
The terms of the Trump administration’s deferred resignation offer stipulate that employees accepting the package will be placed on paid administrative leave until September before officially leaving their roles. Some employees who initially accepted the offer still have the opportunity to retract their resignations.
According to the Federal News Network, the IRS aims to cut its workforce by up to 40% once its reduction-in-force efforts conclude, potentially reducing the agency’s total headcount to between 60,000 and 70,000. An internal memo acquired by news organizations details the agency’s strategy for this significant downsizing.
The workforce reduction will occur in two phases, initially targeting specific departments, including the Taxpayer Experience Office, the Transformation Strategy Office, the Online Services Office, and the Office of Civil Rights. The second phase will see significant reductions in the taxpayer services and compliance divisions.
These staff reductions occur at a crucial time, as the agency has just completed the 2025 tax filing season. The timing of the announcement—coinciding with the April 15 tax deadline—has raised concerns among tax experts about the IRS’s ability to process returns and collect revenue efficiently.
The buyouts and layoffs are part of a broader initiative by the Trump administration to reduce the size of the federal government. The White House anticipated that around 10% of eligible federal workers would accept resignation offers, but the IRS’s response rate has been notably higher.
A Treasury Department spokesperson defended the reductions, stating that the number of IRS employees leaving under Trump is “approximately the same” as the number added during the Biden administration. The spokesperson noted that reversing the “wasteful Biden-era hiring surges” and consolidating key support functions are essential to enhancing both 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.
However, fiscal watchdog groups have warned that the rapid reduction in workforce could impede the agency’s ability to process tax returns and collect revenue, potentially depriving the federal government of significant income. Some tax experts suggest that the Treasury could lose hundreds of billions in tax receipts due to decreased enforcement capabilities.
The IRS has already seen high-profile departures at the leadership level. Acting IRS Commissioner Melanie Krause resigned in March after serving just two months. Several other senior officials, including the chief financial officer, privacy officer, risk officer, and chief of staff, have also left the agency in recent months.
The workforce reductions at the IRS are being carried out in collaboration with the Department of Government Efficiency, led by tech billionaire Elon Musk, which aims to significantly cut the cost and size of the federal bureaucracy across various agencies.
Federal employees receiving reduction-in-force notices must be given at least 60 days’ notice before termination. As of mid-April, reports indicate that only one IRS office had received such notices, suggesting that the full implementation of the workforce reduction plan is still in its early stages.
In addition to personnel changes, the IRS is also addressing potential disruptions from other initiatives, including a cryptocurrency project that could impact the agency’s modernization efforts. These combined factors have created a period of significant transition and uncertainty for one of the government’s most critical revenue-generating agencies.
The immediate and long-term effects of these workforce reductions on tax collection, enforcement, and taxpayer services remain to be seen as the IRS navigates this period of substantial organizational change.
