In a sweeping rollback of Biden-era policies, President Donald Trump’s administration has reduced the IRS workforce by more than 25%, eliminating approximately 26,000 jobs as part of a broader initiative to shrink the federal bureaucracy and rein in what many conservatives view as a bloated and overreaching tax enforcement regime.
The move is part of the administration’s ongoing campaign to cut government spending, reduce agency bloat, and eliminate intrusive oversight that disproportionately impacts middle-class taxpayers and small businesses.
IRS Downsizing: Key Numbers
According to internal agency reports:
25,386 employees have either retired, resigned, or accepted early separation offers.
An additional 294 employees were terminated through formal Reduction in Force (RIF) measures.
Programs used include:
- Deferred Resignation Program (DRP): Allows employees to resign but continue to receive pay until Sept. 30, 2025.
- Voluntary Early Retirement Authority (VERA).
- Voluntary Separation Incentive Payments (VSIP).
Divisional impacts include:
Legal Hurdles and Reinstatements
In early 2025, 7,315 probationary employees were issued termination notices.
Federal courts in California and Maryland ruled those terminations unconstitutional, ordering reinstatement.
However, in May 2025, the IRS restored those employees to full work status.
By July 2025, the U.S. Supreme Court lifted injunctions, allowing RIF actions to proceed.
Budget Cuts & Musk-Led Reform
The IRS cuts align with a broader downsizing effort overseen by the Department of Government Efficiency (DOGE), created under Elon Musk to optimize federal operations and curb waste.
The Trump administration’s latest budget:
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Proposes a 20% base cut to IRS funding.
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Eliminates remaining Inflation Reduction Act (IRA) supplemental funds.
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Results in a total IRS budget reduction of 37% year-over-year.
Purpose: End Political Weaponization and Restore Trust
The Trump administration has framed the IRS overhaul as a necessary course correction after what officials describe as the weaponization of the tax agency under Democrats.
“Hardworking Americans shouldn’t have to live in fear of audits and enforcement campaigns launched to silence dissent or pad federal coffers,” said one senior official involved in the initiative.
Critics of the IRS expansion under President Biden’s administration argued that the agency had become a tool for political targeting, bloated enforcement, and inefficient spending.
Critics Warn of Reduced Service Capacity
While conservatives have largely praised the downsizing, critics warn that such steep cuts will degrade the IRS’s ability to assist taxpayers, process returns, and ensure compliance with tax laws.
“Cutting 37% of the IRS budget may feel like victory to some, but it’s going to leave millions of Americans struggling to access basic tax services,” one former IRS commissioner warned.
