Treasury Inspector General Report Provides Updates on IRS Workforce Reduction Efforts

As a follow up to our earlier post back in March, the IRS began reducing the size of its workforce in February 2025, through the termination of probationary employees and deferred resignation programs. In a newly released report published on May 2, 2025, the Treasury Inspector General for Tax Administration gave an update on the IRS’s progress in the reduction of its workforce which includes additional voluntary separation programs announced in early April 2025, across multiple offices and job categories, and identifying the top six business divisions most impacted by these changes, among other changes associated with these efforts. The report can be found here.

Of the top six business divisions most impacted, the Human Capital Office, Information Technology, Large Business and International, Small Business/Self Employed, and Tax Exempt and Government Entities and Taxpayer Services. Of the top six job categories most impacted, Contact Representatives, IT Management, Miscellaneous Clerical and Assistants, Revenue Agents, Revenue Officers and Tax Examiners. Since February 2025, the IRS workforce reductions amount to approximately 103,000 IRS employee separations across all business divisions and job categories.

The importance of monitoring these IRS employee separations is that these changes could present opportunities to innovate and streamline taxpayer services provided by the Federal Government, while also reimagining how the IRS can best meet the diverse needs of taxpayers across the U.S. It could be the expansion of more modernized services through virtual assistance, user-friendly online tools for filing and tracking returns which we have previously included in earlier blogs, or long-term solutions to improve accessibility and convenience for taxpayers. Additionally, it could lead to broad audits and a greater emphasis on fairness and efficiency, helping to ensure that the U.S. tax system remains equitable.

Please reach out to our firm if you need legal tax assistance. Until then, we will continue to closely monitor these drastic changes and report on any new information as it becomes available.

If you have any questions regarding your individual or businesses’ state and/or federal tax return(s) or received a notice from the IRS, FTB, EDD, CDTFA or any other regulatory agency, please call or email Wilson Tax Law Group, APLC, to setup a consultation with our firm.

Wilson Tax Law Group, APLC is a boutique Orange County tax controversy law firm that specializes in representation of individuals and businesses before federal and state tax authorities with audits, appeals, FBAR, offshore compliance, litigation and criminal defense.  Firm founder, Joseph P. Wilson, is a former Federal tax prosecutor and trial attorney for the IRS and California Franchise Tax Board.  Wilson Tax Law Group, APLC, is comprised of former IRS litigators & Special Agents, and Assistant US Attorneys from the US Attorney’s Office, Central District of California, Tax Division, which at the time handled both civil tax lawsuits and criminal tax prosecutions on behalf of the United States of America.

For further information, or to arrange a consultation please contact: Wilson Tax Law Group, APLC

Tel: (949) 397-2292 (Newport Beach Office) 

Tel: (714) 463-4430 (Yorba Linda Office)

Disclaimer: This blog post is for informational purposes only and does not constitute legal, tax or financial advice. Please consult with a qualified attorney, accountant or financial advisor for specific guidance related to your circumstances.