It’s a tax season nightmare.
The IRS is preparing to lay off thousands of probationary workers during the busy tax season, with potential cuts starting as soon as next week. These layoffs are part of a broader effort by the Trump administration to reduce the size of the federal workforce by eliminating probationary employees who have not yet received civil service protection. However, the exact number of IRS employees affected remains unclear. In addition to the layoffs, the administration had previously announced a “deferred resignation program,” offering buyouts to federal employees in an effort to rapidly reduce government staffing. Employees accepting the buyouts would continue receiving pay until September 30, though IRS employees working on the 2025 tax season were told they would not be eligible for buyouts until after the filing deadline.
The 2025 tax season began on January 27, with the IRS expecting over 140 million tax returns to be filed by April 15. While the Biden administration had invested heavily in the IRS, providing an $80 billion boost through the Inflation Reduction Act to enhance customer service, enforcement, and technology, Republicans have sought to reduce that funding. This push to downsize the IRS comes amidst ongoing political debates over federal spending priorities and efficiency.
Billionaire Elon Musk, alongside his Department of Government Efficiency, has advocated for radical cuts to federal agencies, including potentially eliminating entire departments. These efforts have faced resistance from some lawmakers, and a legal challenge has arisen. Attorneys general from 14 states filed a lawsuit against Musk, arguing that his actions—specifically accessing sensitive government data—are unconstitutional. The lawsuit asserts that such powers should be reserved for Senate-confirmed officials.
The IRS has not disclosed how many employees will be impacted by the layoffs, and both the U.S. Treasury and IRS have not responded to inquiries about the situation. As the tax season continues, the agency faces the challenge of managing a large workload while dealing with staffing reductions and ongoing changes to its budget and structure. These developments highlight the broader conflict between efforts to shrink the federal workforce and the need for sufficient resources to carry out critical functions, like tax collection and enforcement.
