28 Percent Yearly Decline in IRS Staffing, Watchdog Says

The number of people staffed at the Internal Revenue Service (IRS) has dropped by 28 percent over a one-year period, according to a June 9 report from independent federal watchdog Treasury Inspector General for Tax Administration.

Since January last year, the IRS has moved to cut down its workforce in compliance with executive orders from President Donald Trump and guidance set by the Office of Personnel Management, the report said. The Trump administration offered several options for IRS employees to exit the workforce, including the Deferred Resignation Program (DRP) in January 2025 that allowed most workers to resign but continue receiving pay and benefits through September 2025.

“The IRS reported that 31,273 employees either voluntarily separated, took a DRP offer, or used some other incentive to leave from January 2025 through January 2026. These departures represent approximately 30 percent of the IRS’s workforce and impact certain business units more than others,” the report said.

“The IRS backfilled select positions and as of January 2026, approximately 2,000 employees have been hired. As a result, the net effect on IRS staffing was a decrease of 28 percent.” As of January 2026, there were roughly 74,000 employees at the tax agency.

In addition to offering workers incentives to separate from the IRS, Trump signed an executive order on Feb. 11, 2025, that called on reforming the federal workforce to “maximize efficiency and productivity.”

Specifically, the order called on agencies to hire no more than one employee for every four workers who depart. Agency heads were asked to prepare for initiating “large-scale reductions in force.”

In its report, the Treasury Inspector General for Tax Administration said that the IRS’s Taxpayer Services unit reported the highest number of employee exits, with 11,284 workers leaving the division.

The Small Business/Self Employed unit lost 9,796 employees, contact representatives reported the exit of 7,512 workers, the tax examiners division lost 5,001 employees, and revenue agents fell by 3,864.

State-wise, Texas, California, Georgia, and Utah recorded the highest number of employee exits.

The largest number of employees who left the IRS had served the agency for around one to 11 years. The least number of separations was among employees working with the IRS for 11 to 21 years.

Other federal agencies and departments have also reported a large-scale decline in employee counts in the first year of the second Trump administration.

For instance, the Department of War shed a net 78,083 positions between Jan. 20, 2025, and Jan. 20, 2026, according to data from the Office of Personnel Management. During this period, the Treasury eliminated a net 28,951 employees while 27,890 workers left the Department of Veterans Affairs.

In total, the entire federal civilian workforce shrank by around 12 percent over the Trump administration’s first year.

IRS Operational Impact

The IRS has faced criticism over its workforce reduction. On Dec. 21, a group of lawmakers wrote a letter to Treasury and IRS officials, raising concerns that the agency was not prepared to deal with the 2026 tax filing season.

Lawmakers cited workforce reductions and a turnover in IRS leadership as challenges facing the agency.

“Taxpayers deserve to have the information and assistance they need to file their taxes and receive their refunds in a timely manner,” the lawmakers wrote. “The Trump Administration’s relentless attacks on the IRS threaten its ability to serve the public and undercut its mission to provide taxpayers with top quality service and ensure that our tax laws are enforced with integrity and fairness.”

In an April 2 statement, less than two weeks before the end of the filing season, the IRS said that the season was “progressing smoothly.”

“The IRS continues to provide historically outstanding service to taxpayers,” IRS Chief Executive Officer Frank J. Bisignano said at the time. “Tens of millions of Americans are getting their refunds direct deposited in their bank accounts and their returns processed promptly without error or delay.”

As of May 8, the IRS processed more than 143.92 million returns, which was 0.3 percent higher compared to May 9, 2025, the tax agency said in a May 18 update.

The agency also issued 6 percent more refunds. The average refund amount was $3,276, up 11.5 percent from a year back.