- IRS workforce reduction targets 1 in 4 employees by 2025
- Civil Rights & Compliance Office faces 75% staff elimination
- 7,000 probationary workers reinstated after federal court intervention
- Taxpayer services prioritized through April 15 deadline extensions
The Internal Revenue Service has initiated its largest workforce reduction in decades, with 20,000 positions slated for elimination under the Department of Government Efficiency's restructuring plan. Three anonymous Treasury officials confirm the first phase focuses on dissolving specialized divisions, including the Office of Civil Rights and Compliance. This controversial strategy follows three failed congressional attempts to modernize tax enforcement infrastructure through bipartisan legislation.
Industry analysts warn the staff cuts could create a $47 billion annual tax gap due to reduced audit capacity. Former IRS Commissioner John Koskinen notes, Losing institutional knowledge from seasoned employees risks catastrophic system failures during peak filing periods.The agency's shift toward AI-driven compliance tools remains underfunded, with only 12% of promised modernization funds allocated through 2026.
In Florida's Palm Beach County, taxpayer assistance wait times have tripled to 53 minutes since February's initial layoffs. Local CPA Maria Gonzalez reports, Five clients received incorrect penalty notices this month alone – errors we directly attribute to understaffed processing centers.The regional office recently closed its Taxpayer Advocate Service wing, eliminating free in-person help for 300,000 low-income filers.
Legal challenges complicate the workforce reduction timeline. Federal Judge Amit Mehta's March injunction temporarily protected 7,200 employees, arguing the IRS violated its own union agreements. However, the agency circumvented these protections through the Deferred Resignation Program, offering $25,000 buyouts to employees nearing retirement eligibility. Union representatives allege this targets higher-salaried workers to maximize short-term budget savings.
The Treasury Department maintains these changes will ultimately improve services through strategic automation investments.A spokesperson highlighted the success of voicebot systems handling 14 million simple queries in Q1 2024, though failed to address concerns about complex case resolution delays. With staffing levels at 1974 lows and taxpayer filings increasing 9% annually, experts question the plan's long-term viability.
