The administration has slashed the IRS workforce by nearly 26,000 people through buyouts and firings, marking a 25% reduction in staffing as President Trump works to reverse President Biden’s buildup at the tax agency.
The cuts sliced through some of the most prominent IRS divisions, taking out 27% of the tax examiners and 26% of the revenue agents, the Treasury Inspector General for Tax Administration said.
Information technology is shedding 23% of its workforce, and the management and analysis division will lose 28% of its staff.
“These separations will have nationwide implications,” the inspector general said.
The data, which was current as of May, showed that most of the departing staffers have accepted one of the administration’s various buyout offers.
That included about 4,600 approved under the initial January buyout offer and 17,000 approved for voluntary early retirement. Thousands more were part of smaller separation programs, and about 300 were from an official “reduction in force.”
Alex Muresianu, senior policy analyst at the Tax Foundation, said staffing cuts aren’t always a problem. However, he said they can be a problem when coupled with new roles for the IRS, such as during the pandemic emergency, and could come into play as the agency implements changes from Mr. Trump’s One Big Beautiful Bill Act.
“The confluence of low staffing levels and new policies is a messy mix,” he said. “I think that is a potential challenge in the coming tax season.”
Mr. Muresianu said all sides should agree that IRS staffing is essential in customer service.
Mr. Trump’s cuts would have gone deeper. In February and March, the IRS tried to fire more than 7,300 probationary employees. Some ended up taking buyouts. After legal wrangling, the IRS canceled other firings and about 3,000 returned to work.
The final result is that the IRS expects to lose some 25,680 employees because of Trump administration separations, the inspector general said.
Some remain on the books under the terms of their buyouts, on paid administrative leave through September or the end of the year. When they are gone, the IRS workforce will drop to 77,000, down from 103,000 in January.
Fights over IRS staffing have long been proxy for broader questions about tax policy. Republicans demand a slimmer agency that they say will be less scary to taxpayers, and Democrats say the agency needs more people to ensure the rich are paying what they owe.
For most of the 2010s, Republicans were winning that fight. Congress cut the IRS workforce from about 98,000 in 2012 to 78,000 in 2019.
After the 2020 elections, Democrats took full control of Congress. Mr. Biden’s 2022 budget-climate law pumped tens of billions of dollars into the IRS to hire examiners, agents and support staff, increasing the workforce to 103,000.
Congress has begun to claw back nearly half of Mr. Biden’s allocation, and Mr. Trump is pushing to reverse the Biden increases.
In addition to the buyouts, he has proposed more workforce and operations cuts in his fiscal year 2026 spending plan, which Congress is debating.
The challenge for the IRS will be ensuring the cuts don’t decrease customer service.
IRS service cratered after the reductions a decade ago, and most taxpayer phone calls went unanswered in 2021.
Meanwhile, audit rates dropped across most demographics, benefiting the wealthy. For those with annual incomes of $10 million or more, audit rates fell from 212 per 1,000 returns in 2010 to just 39 in 2018.
Over the same period, rates for those earning less than $25,000 annually dropped from 10 per 1,000 to four.
The Yale Budget Lab has projected that cutting IRS staffing by 50,000 people would cost the government nearly $400 billion in lost tax revenue over 10 years.
However, Thomas Schatz, president of Citizens Against Government Waste, said revenue continues to flow to the Treasury, so the cuts don’t appear to be hurting the bottom line.
He also said the IRS can use this moment to make other changes, such as encouraging taxpayers to file electronically and modernizing its technology.
“It is a good opportunity to really make this a simpler process,” he said.
