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Close to 20,000 Internal Revenue Service (IRS) employees—roughly 20% of the agency’s workforce—are accepting a deferred resignation offer from the Trump administration, according to a Bloomberg report published on tax day.
The move comes as part of a broader federal downsizing initiative led by the Trump administration and Elon Musk’s Department of Government Efficiency (DOGE). The report also follows an earlier round of buyouts this year, in which 4,700 employees departed, and nearly 7,000 probationary workers were placed on administrative leave.
A Blow to IRS Capacity
The Internal Revenue Service, already under strain during the 2025 tax season, is now grappling with a historic staffing loss. Employees involved in the tax season were told they could only accept the buyout after the filing deadline, ensuring this wave of resignations hit immediately after the busiest time of year for the agency.
The terms of the buyout allow federal employees to cease working immediately while still receiving paychecks and benefits through September, giving them a financial cushion as they transition out.
“This buyout is a reflection of our commitment to efficient governance and responsible spending,” a Trump administration spokesperson said, referencing DOGE’s mission to shrink the federal workforce.
Undoing Biden-Era Expansion
Under President Biden’s Inflation Reduction Act, the IRS was granted $80 billion to boost staffing, upgrade technology, and enhance enforcement. According to Bloomberg, this latest round of buyouts would effectively erase those staffing gains, raising serious concerns about the agency’s ability to function during upcoming tax seasons.
“They’re reversing everything we put in place to modernize and restore the agency,” said a former senior IRS official. “The impact on audits, customer service, and fraud detection will be profound.”
The IRS has said it will reallocate personnel from other departments to assist with future tax filings, though experts say that will offer only a temporary patch.
Leadership Shake-Up
The wave of resignations also includes top leadership departures:
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Acting Commissioner Melanie Krause announced her resignation
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Douglas O’Donnell, her predecessor, left earlier this year
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Danny Werfel, a Biden appointee, resigned on Trump’s inauguration day
These exits signal internal unrest and instability within an agency that has frequently been caught in political crossfire.
Bottom Line:
The Trump administration’s aggressive reduction of the IRS workforce—under the direction of Elon Musk’s DOGE—marks a significant reversal of Biden-era investments. With nearly 1 in 5 IRS employees departing, the long-term effects on tax enforcement, federal revenue collection, and public services may be dramatic. The timing of the exodus—on tax deadline day—underscores the symbolic and operational significance of the move.
