The IRS intends to cut up to 40% of its workforce after the official end of tax filing season on Tuesday, according to an internal memo obtained by CBS News and distributed to IRS employees this week.
The memo stated that the IRS will send Reduction in Force (RIF) notices biweekly. According to the RIF plan, the agency will reduce its workforce from 102,000 to “ending figures” of 60,000 to 70,000. The Federal News Network first reported on the memo.
The Office of Personnel Management issued a deadline of April 14 for agencies to submit RIF plans for approval. It is unclear whether the IRS’s plan has received full approval from the Treasury Department or the OPM.
The official deadline for most taxpayers to file taxes was April 15, but if a taxpayer is granted an extension, they have until October 15 to file without penalty.
According to the memo, the IRS will implement two RIF phases, with the first phase being evaluated in August. According to the memo, the Office of Civil Rights, the Taxpayer Experience Office, the Transformation Strategy Office, and the Online Services Office are among the agency’s “core functions” that will face “high” cuts during Phase One. In phase two, those offices are labeled as “Consolidate.”
According to the memo, “taxpayer services and compliance” employees will face “high” cuts during phase two. According to the memo, “career executives” will go through another RIF between the two phases.
In response to the RIF memo, a Treasury spokesperson stated that the reductions “currently being considered” at the IRS are “part of — and driven by — process improvements and technological innovations that will allow the IRS to collect revenue and serve taxpayers more effectively.”
“Reducing wasteful Biden-era hiring surges and consolidating critical support functions are critical to improving both efficiency and service quality. The Secretary is committed to achieving efficiency while providing the collections, privacy, and customer service that the American people expect,” the spokesperson added.
According to multiple sources familiar with the situation, over 20,000 IRS employees are expected to leave the agency through the IRS’s own Deferred Resignation Program offer, known as DRP 2.0, which could help the cutbacks goal. This was first reported by Bloomberg Tax.
Acting Commissioner Melanie Krause and other senior leaders have opted into the program and may leave the agency as early as April 28.
When asked about the 20,000 leaving under DRP 2.0, the Treasury spokesperson cited the Biden administration’s expansion of the IRS by over 22,000 employees through $80 billion in funding from the Inflation Reduction Act.
“Under new leadership, approximately the same number of employees have left the IRS, with a vast majority leaving voluntarily through the Deferred Resignation Program,” they informed us.