The IRS will cut thousands of workers on probationary status as part of ongoing efforts by the Trump administration to reduce costs. It’s unclear how the cuts could impact the tax filing season, which kicked off on January 27, 2025. The cuts follow on the heels of other reductions to IRS personnel and the IRS budget.
Cuts
According to an official email viewed by Forbes, some of those cuts will be made this week. At least 3,500 IRS employees in the Small Business/Self-Employed (SB/SE) division of the IRS are expected to lose their jobs. The SB/SE division, currently headed up by Lia Colbert, serves more than 57 million small business owners and self-employed taxpayers—those with less than $10 million of assets. SB/SE employees may include those in the exam (audit) and collections departments and workers in operations support and fraud enforcement.
Those employees that are most at risk to be cut are probationary employees. While probationary employees are often recent hires (meaning within the last one to two years), they don’t have to be—those who have been serving for years but were recently moved or promoted into a new position also qualify as probationary.
Additional cuts beyond the SB/SE division are likely also on the way; ABC News has put the potential firings at 15,000.
Current employees have shared their concerns about job losses directly with Forbes and have indicated that they have been told that additional firings are planned in Atlanta and Kansas City. Forbes has not independently confirmed those reductions, but the Kansas City Star reports that IRS employees are “bracing for upwards of 1,000 layoffs this week.”
Other Reductions In the IRS Workforce
Earlier this year, the IRS recalled workers who had accepted the offer to leave their positions early. On January 27, 2025, the day after the IRS began accepting individual tax returns for 2024, the Office of Personnel Management sent more than two million full-time federal workers an email offering them the option to resign from their positions but stay on the payroll through September 30, 2025 (the end of the fiscal year). Employees had until February 6 to accept the Deferred Resignation Program (DRP) offer. Days before the offer expired, a message to IRS employees from the IRS Human Capital Officer announced those in “specific, critical filing season positions” may not participate in the DRP.
The IRS confirmed that specific, critical filing season positions are now exempt from the DRP until May 15, 2025. It is unclear who exactly fits that criteria, but the memo notes that it includes those in Taxpayer Services, Information Technology, and the Taxpayer Advocate Service. Those who have accepted the offer and stopped working but fall within the exception were advised to be told when to return to work.
Trump also issued an executive order freezing hiring for most federal agencies. The freeze is intended to be temporary, with one exception—the IRS. Under the executive order, within 90 days, the Director of the Office of Management and Budget (OMB), in consultation with OPM and DOGE, must submit a plan to reduce the size of the government’s workforce. Once the plan is submitted, the freeze will expire for all agencies other than the IRS. With respect to the tax agency, the hiring freeze will remain in place until the Secretary of the Treasury, in consultation with OMB and DOGE, “determines that it is in the national interest to lift the freeze.”
And Trump subsequently suggested he might fire IRS employees—or send them to the border. “They hired, or tried to hire, 88,000 workers to go after you and we’re in the process of developing a plan to either terminate all of them, or maybe we’ll move them to the border,” he told a crowd at the Circa Resort & Casino in Las Vegas.
(What he’s referring to is misinformation that went viral in 2022 and 2023 about IRS funding in the Inflation Reduction Act. The statements were weaponized in the public arena, suggesting that the IRS was arming its entire workforce. Former chief Jim Lee said last year that this was “wildly inappropriate and dangerous.”)
Last week, the Department of Homeland Security followed up by asking Treasury Secretary Scott Bessent to deputize IRS agents to help with efforts to crack down on immigration. A February 7 letter sent out by DHS Secretary Kristi Noem to Bessent suggests that IRS workers could assist DHS with auditing employers charged with hiring illegal immigrants as well as investigating human trafficking. Those skills appear to be directed at CI workers, and Noem repeatedly mentions “law enforcement” personnel. But she doesn’t specify CI and asks for assistance with certain functions that employees outside of the criminal division now perform, such as contract oversight, monitoring civil dockets and conducting “financial audits of businesses suspected of employing illegal immigrants.”
IRS Workforce
The IRS workforce has been subject to scrutiny in recent months. Hiring had been up, thanks to Inflation Reduction Act funding. The extra money was intended to help the IRS hire 87,000 new workers—including customer service and IT workers—over the next decade. Former IRS Danny Werfel had previously estimated that factoring in attrition, the IRS is approaching 90,000 full-time employees. That may look high compared to 2022, but it’s the same as roughly a decade ago and far below staffing numbers in the 1990s.
In addition to the cuts, Republicans have clawed back roughly half—$40 billion out of the $80 billion—of the Inflation Reduction Act funds.
Neither the IRS nor the Treasury Department responded to a request for comment—all too common in recent weeks. A source has suggested that all comments to the media must be approved at the top, resulting in long delays in response—or none at all.
DOGE Access
The cuts have come as Elon Musk’s Department of Government Efficiency (DOGE) has also been seeking access to IRS data in the Integrated Data Retrieval System (IDRS). You can think of the IDRS as a master file, which includes tax returns and other taxpayer information, including bank records.
This week, Senators Ron Wyden (D-Oregon) and Elizabeth Warren (D-Mass.) sent a letter to acting IRS Commissioner Douglas O’Donnell, including an “urgent demand” for information related to efforts to access that information. The Senators have requested that the IRS “immediately disclose to the Senate Committee on Finance the full extent of the potential access to IRS systems and data granted to DOGE team members so that the Committee can address any efforts by DOGE personnel to gain access to taxpayer records at the IRS, which may constitute criminal violations of federal privacy laws.”
The Senators also wrote that they were concerned that “DOGE personnel meddling with IRS systems in the middle of tax filing season could, inadvertently or otherwise, cause breakdowns that may delay the issuance of tax refunds indefinitely.”
“Any delay in refunds,” they wrote, “could be financially devastating to millions of Americans who plan their budgets around timely refunds every spring.”
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