IRS Sheds 26 Percent of Staff as Federal Workforce Pared Down: Report

The cuts are part of the administration’s effort to downsize government and reduce bureaucratic bloat.

The Internal Revenue Service (IRS) in Washington on March 10, 2025. Madalina Vasiliu/The Epoch Times

A new report from the head of the IRS’s Taxpayer Advocate Service shows that the agency has lost more than one-quarter of its workforce since President Donald Trump assumed office.

The overhaul is consistent with the administration’s effort to slim down the federal government, but it raises questions about the agency’s readiness for the 2026 tax season.

According to the June 25 report, the IRS workforce has dropped from 102,113 employees to 75,702 since January—a roughly 26 percent reduction. The majority of those departures came through voluntary exit programs rolled out by the Department of Government Efficiency (DOGE), a Trump administration initiative to shrink the federal workforce, boost bureaucratic efficiency, and reduce deficits.

Of the 26,411 employees who left the agency since Jan. 25, more than 17,500 took buyouts through the DOGE-related “fork in the road” resignation offer, formally known as the Deferred Resignation Program.

Another 1,475 exited through early retirement or voluntary separation incentives, while nearly 3,000 departed through standard attrition such as resignation, termination, or death.

National Taxpayer Advocate Erin M. Collins, who heads the Taxpayer Advocate Service, which produced the report, praised the IRS for delivering one of its smoothest filing seasons in recent memory this year. But she warned that the sharp reduction in personnel—particularly in areas such as taxpayer services, IT, and small business operations—could strain the agency in the year ahead.

“The 2025 filing season was one of the most successful filing seasons in recent memory,” Collins said in a statement. “But with the IRS workforce reduced by 26 [percent] and significant tax law changes on the horizon, there are risks to next year’s filing season. It is critical that the IRS begin to take steps now to prepare.”

The report noted that many of the agency’s most experienced leaders were among those who left, compounding operational challenges. Some key preparatory steps—such as hiring and training seasonal workers—had yet to begin as of mid-year, raising concerns about potential gaps when the filing season opens in January 2026.

The staffing reductions are part of a broader Trump administration push to reduce the size of the federal bureaucracy. A February executive order called for a “critical transformation” of the civil service and instructed agencies to root out what it described as “waste, bloat, and insularity.”

A subsequent memorandum from the Office of Management and Budget laid out plans for deep workforce cuts across non-defense agencies.

Critics Assail Downsizing

While proponents of the downsizing initiative argue that it will foster a more efficient and accountable federal bureaucracy, critics say the cuts could hollow out government services.

“The IRS is underfunded, understaffed, and underappreciated,” Rep. Steny Hoyer (D-Md.) said at a June 25 Capitol Hill briefing on the Trump administration’s IRS cuts.

Former IRS Commissioner John Koskinen also criticized the downsizing, calling it “nonsensical” to weaken the agency responsible for collecting revenue needed to run the government—particularly amid calls for deficit reduction.

The watchdog report also flagged potential upcoming budgetary pressures. The Trump administration’s fiscal 2026 budget proposal calls for a 20 percent cut to IRS appropriations, and a total reduction of 37 percent when accounting for the expiration of Inflation Reduction Act funds, the report noted.

“A reduction of that magnitude is likely to impact taxpayers and potentially the revenue collected,” Collins wrote.

Collins urged the administration to lift its hiring freeze and grant direct hiring authority so that the IRS can bring on essential staff in time to prepare for next year’s tax filing season. Without swift action, she warned, taxpayers could face longer wait times, service delays, and greater frustration.

Looking ahead more broadly, the administration’s fiscal blueprint envisions cutting a net 107,000 jobs across non-defense agencies next year—a more than 7 percent reduction relative to current staffing levels. The proposed cuts include both executive actions that can be implemented without legislation and broader proposals that require congressional approval.

Actual reductions may be even steeper. Several agencies, including the Department of Defense, have announced planned cuts that were not included in the June budget documents. The White House has acknowledged that the published staffing figures “may not reflect all of the management and administrative actions underway or planned in federal agencies.”

Some of the Trump administration’s workforce reduction efforts have been challenged in court. Judges have blocked implementation of certain cuts, including downsizing initiatives at the State Department and the Department of Education.

Meanwhile, the latest government jobs report, released on June 6, shows that, since January, the federal government workforce is down by 59,000 workers. The federal government employed about 3 million people as of November 2024, according to USAFacts.