The IRS has a draft to reduce up to 50% of its staff

The Internal Revenue Service (IRS) drafted a plan to reduce up to 50% of its workforce through layoffs, job eliminations and voluntary retirement programs, according to sources with knowledge of the process.

The initiative is part of the Trump administration's strategy to shrink the size of the federal government through the Department of Government Efficiency (DOGE), led by billionaire Elon Musk. The plan calls for laying off probationary employees, eliminating civil service protections and offering severance packages through a "deferred resignation program" aimed at federal workers.

Thousands of layoffs have already begun

Restructuring is already underway. In February, the IRS laid off about 7,000 probationary workers with less than a year of service. The agency currently has approximately 90,000 employees nationwide.

In addition, while most federal employees are eligible for the voluntary retirement program, IRS workers involved in the 2025 tax season were informed that they will not be eligible for these benefits until after April 15.

Transfers to the Department of Homeland Security

Parallel to the downsizing, the Trump administration has decided to transfer IRS employees to the Department of Homeland Security (DHS) to bolster immigration enforcement efforts. In a letter sent in February, DHS Secretary Kristi Noem asked Treasury Secretary Scott Bessent to second workers from the tax agency to assist in the fight against illegal immigration.

Ongoing implementation

The White House memo states that all federal agencies, including the IRS, must submit their downsizing report by March 13. Although the administration has not provided details on the exact timeline, the IRS reorganization is already underway and is in the implementation phase.