Trump administration plans massive IRS layoffs as part of government downsizing

US President Donald Trump

The Internal Revenue Service is preparing for a major workforce reduction that could see up to half of its 90,000 employees laid off, according to CNN.

The layoffs are part of the Trump administration’s broader strategy to shrink the federal government. The effort, led by billionaire Elon Musk’s Department of Government Efficiency, includes closing agencies, dismissing probationary employees without civil service protection, and offering buyouts through a “deferred resignation program.”

A source, speaking anonymously to CNN, stated that the layoffs will occur through a combination of job cuts, attrition, and incentivized exits. If implemented fully, the cuts would leave the IRS significantly understaffed. Former IRS commissioner John Koskinen has warned that such reductions would render the agency “dysfunctional.”

Already, about 7,000 probationary employees with less than a year of service were dismissed in February. The IRS also offered buyouts to nearly all federal employees, though those involved in the 2025 tax season have been barred from accepting buyouts until mid-May, after the tax filing deadline.

The administration also intends to transfer IRS workers to the Department of Homeland Security to assist with immigration enforcement. In a February letter, DHS Secretary Kristi Noem requested US Treasury Secretary Scott Bessent to reassign IRS employees for this purpose.

The IRS workforce currently consists of approximately 56% people of colour and 65% women, according to agency data. The potential job losses could disproportionately affect these groups, though no official demographic impact assessment has been released.

Six former IRS commissioners recently wrote in The New York Times, cautioning that “aggressive reductions in the IRS’s resources will only render our government less effective and less efficient in collecting the taxes Congress has imposed.”

A February White House memo instructed federal agencies to submit reduction plans by March 13, though it remains uncertain whether the IRS proposal will be approved or over what timeframe it would be implemented.