As part of the administration’s broader cost-cutting efforts across the federal government, the IRS is set to lay off thousands of employees as early as this week.
While the Biden administration pursued a multibillion-dollar overhaul of IRS systems, Republicans have been actively working to roll back much of the agency’s funding.
The start of tax season could become significantly more challenging for both taxpayers and tax professionals like CPAs and accountants. According to Associated Press and ABC News reports, the Internal Revenue Service (IRS) may lay off up to 15,000 employees in the coming week. These layoffs are expected to primarily impact recently hired workers in entry-level positions, such as those in taxpayer response centers, phone support, and junior audit roles. These employees are typically on probationary status and lack the protection of civil service employment.
With approximately 90,000 full-time employees, the IRS could lose roughly 17% of its workforce with these layoffs. It is not clear how the widespread IRS layoffs will affect this tax season, which officials expect to see more than 140 million returns. Two insiders confirmed to the Associated Press that the affected employees are all in probationary roles with limited tenure.
The layoffs could take effect as early as next week, just a month after the IRS began processing tax returns.
The timing of this during tax season will undoubtedly present challenges. If layoffs proceed, they will stem from directives issued by the Department of Government Efficiency (DOGE), an unofficial agency established by President Donald Trump to target perceived inefficiencies in the federal bureaucracy. Trump has enlisted Tesla and SpaceX CEO Elon Musk to spearhead these efforts.
This follows similar layoffs across other federal agencies, raising concerns about the rapid pace of these actions—many of which have been implemented after only brief reviews by non-audit or accounting staff of critical government systems.
Musk’s DOGE Team Pursues Access to IRS Taxpayer Records To Review Data and Fix Waste Within the Agency
According to the New York Times, the Internal Revenue Service is reportedly preparing to grant a team member from Elon Musk’s so-called Department of Government Efficiency access to sensitive taxpayer data.
The 2025 tax season officially began on January 27, with the IRS expecting over 140 million tax returns to be filed by the April 15 deadline. The Biden administration significantly boosted IRS funding with an $80 billion investment through the Democrats’ Inflation Reduction Act. This funding aimed to modernize the agency by hiring tens of thousands of new employees for customer service and enforcement and upgrading its technology infrastructure.
President Trump has long criticized the IRS, frequently accusing it of being overly aggressive in auditing his finances.
In a fundraising email on Saturday, he floated the idea of allowing Elon Musk’s team to audit the tax agency, asking recipients:
“Are you sick of being targeted and harassed by the IRS? Well, maybe it’s time that somebody audited them for a change!”
Is this a win for Small Businesses or Wealthy Individuals?
The IRS is facing a major shake-up. Up to 15,000 employees could be laid off next week as part of a broader effort to reduce government spending and streamline operations.
The agency has been heavily funded and accused of targeting hardworking Americans for years. Now, in the middle of tax season, it’s being forced to downsize.
While some media outlets warn of potential delays in refunds and audits, a leaner IRS could reduce government overreach, ease burdens on small businesses, and provide more financial freedom for middle-class families. However, critics argue that the real winners are high-income earners.
“Millionaires and billionaires are celebrating knowing there will be 15,000 fewer workers to audit them,” one commenter noted. “If you’re worried about audits, you must have a high income—only 1% of all audits target those making under $100K per year.” Some have raised concerns about cybersecurity risks, questioning whether it’s safe to file a tax return under the current circumstances. Many suggest that this year might be a good time to consider filing an extension (Form 4868) as a precaution.
