The combination of deferred resignation offers being accepted and reductions in force could result in the IRS workforce being gutted by up to 40% over the coming months, according to published reports on April 15.
An internal memo said the IRS workforce, which sat at approximately 100,000 when President Donald Trump took office on Jan. 20, could be reduced to as little as 60,000 to 70,000 employees, according to Federal News Network and Politico. The memo was also posted Tuesday on Reddit.
The layoffs, which are also happening at other federal agencies, are part of the Trump administration’s plan to cut wasteful spending and downsize the federal government.
Federal employees must receive a 60-day notice of RIF if their position is being terminated, under Office of Management and Budget regulations, Politico reported.
- Related article: Roughly 20,000 IRS Workers Have Requested DRP 2.0 Offer, Reports Say
- Related article: IRS Workers Faced a Resignation Deadline as Americans Rushed to File Their Taxes
- Related article: IRS Probationary Employees Told Not to Come Back to Work on April 14 After All
- Related article: IRS Workers Get Final Chance to Take Deferred Resignation Offer
The IRS will conduct the RIF in two phases and will target more severe cuts in specific offices. Key details mentioned in the memo include:
- RIF notices will be issued biweekly starting this week.
- Career executives will face an additional RIF between Phase 1 and Phase 2.
- Secondary functions supporting the primary ones can expect to be impacted first.
- Competitive areas and rosters will be recalibrated for the second deferred resignation program (DRP 2.0), VERA (Voluntary Early Retirement Application), VSIP (Voluntary Separation Incentive Program), and DSR (discontinued service retirement).
- Taxpayer services and compliance “will need to be trimmed.”
- Operational impact of Phase 1 will be evaluated; findings expected August 2025.
Each IRS office was assigned either a “low,” “moderate,” or “high” designation for staffing cuts—for both Phase 1 and Phase 2. For example, in the first phase, the agency’s Office of Civil Rights and Compliance, Online Services Office, Taxpayer Experience Office, and Transformation Strategy Office received a “high” label.
Receiving a “moderate” designation in Phase 1 were the Compliance Office, the Office of the Chief Information Officer, the Office of the Chief Operating Officer, Direct File, Office of the Chief of Staff, Communications Office, and the Appeals Office.
The staffing cuts would have a “low” impact on Taxpayer Services and the Office of the Chief Counsel.
In Phase 2, most offices with a high level of staffing cuts in Phase 1 would be consolidated into other areas. For example, 75% of the Office of Civil Rights and Compliance will be reduced by the RIF, according to an email sent to employees earlier this month. About 5% of the office’s employees had already left via taking the Trump administration’s deferred resignation offer earlier this year and through attrition, the email states.
Those Office of Civil Rights and Compliance employees who remain will be moved to the Office of the Chief Counsel “to continue to carry out its statutory responsibilities,” the email states. According to the Associated Press, fewer than 200 people work in the civil rights office.
Other offices slated for consolidation in Phase 2 include Taxpayer Experience and Transformation Strategy.
Below is a chart from the April 15 internal memo that shows the Phase 1 and Phase 2 impacts of the RIFs for each IRS function:
| Core Function | Phase 1 Impact | Phase 2 Impact |
|---|---|---|
| Taxpayer Services | Low | High |
| Compliance | Moderate | High |
| Chief Information Officer | Moderate | Moderate |
| Chief Operating Officer | Moderate | Moderate |
| Chief Counsel | Low | Moderate |
| Direct File | Moderate | Low |
| Chief of Staff | Moderate | Low |
| Communications | Moderate | Low |
| Civil Rights | High | Consolidate |
| Appeals | Moderate | Moderate |
| Online Services | High | Moderate |
| Taxpayer Advocate | Moderate | Moderate |
| Taxpayer Experience | High | Consolidate |
| Transformation Strategy Office | High | Consolidate |
Federal News Network reported April 9 that the Treasury Department expects to cut up to half of IRS enforcement personnel and reduce staffing by up to 20% across other components within Treasury.
The Treasury Department told the Office of Personnel Management that it “anticipates significant cuts beginning in 2025 through 2026” as part of its agency reorganization and RIF plan.
The information reported by Federal News Network is from a request made by Treasury to OPM for VERA authority. The text of that request was posted on Reddit last week and confirmed by other users. The request says:
In accordance with the Presidential actions and initiatives to reduce the size of the Federal Government and achieve a more streamlined and flexible workforce, the Department of the Treasury requests Voluntary Early Retirement Authority (VERA). This request will assist the Department in achieving the President’s goal of reducing the size of the federal workforce through attrition by authorizing early retirements in lieu of separating employees through time consuming, labor intensive reduction in force procedures. The VERA will enable Treasury to achieve a similar off boarding outcome (DSR if separated under RIF) and accelerate attrition for employees who would be eligible to retire if offered a VERA. If approved, Treasury will use the authority in phases, over a period of 18 months, as a part of our restructuring efforts. Treasury Agency Reorganization & RIF Plan anticipates significant cuts beginning in 2025 through 2026, of up to 50% of the Enforcement function at the IRS, and up to 20% across the other components within Treasury.
Treasury and the IRS provided tax agency employees with three voluntary separation options.
One was to take a buyout offer through the Trump administration’s second deferred resignation program, called “DRP 2.0,” and be put on paid administrative leave through the end of September. Roughly 20,000 employees, or one-fifth of the IRS workforce, requested to take DRP 2.0 before the deadline concluded on April 14, according to published reports, but employees are still waiting for the contracts to be released so they can sign the resignation offer.
Under the terms of the Trump administration’s second deferred resignation offer, employees who take the deal will be put on paid administrative leave through Sept. 30 and then leave their federal jobs. IRS workers eligible for DRP 2.0 could start paid administrative leave as early as April 28, and “generally no later” than June 2, said an email sent to Treasury Department employees earlier this month.
Approximately 5,000 IRS workers took the administration’s first deferred resignation offer in January and have resigned.
Acting IRS Commissioner Melanie Krause and IRS Chief Information Officer Rajiv Uppal are said to be among those who are taking DRP 2.0.
The second voluntary separation option was VERA. IRS employees who are at least 50 years old with at least 20 years of creditable federal service, or any age with at least 25 years of creditable federal service, are eligible for VERA. Those eligible for VERA after Sept. 30, 2025, but before Dec. 31, 2025, can choose to retire, and those employees’ separation dates will be the earliest date on which they are eligible to retire.
In addition to VERA, some employees may also be offered the VSIP, which is essentially a buyout. This program allows agencies going through downsizing or restructuring to offer lump-sum payments of up to $25,000 (or an employee’s severance pay amount, whichever is lower) to encourage voluntary retirement or resignation. According to The Tax Adviser, employees accepted for this program must leave no later than May 31. Administrative leave is not available under the VSIP.
Approximately 6,700 IRS probationary workers were laid off in February, but they were reinstated and put on paid leave in March after two favorable court rulings. Those probationary workers were set to return to their jobs on April 14; however, that plan was put on hold by the IRS, and they remain on paid leave. Many probationary workers fear they will be targeted in the updated RIF plan given their current situation.
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Tags: IRS, IRS employees, IRS layoffs
