IRS Faces Looming Departure Of 20,000 Employees

US Capitol building with large dome and steps

Internal discord within the IRS has reached a critical point, with 20,000 employees ready to resign.

Quick Takes

20,000 IRS employees plan to resign due to a controversial program.
The legality of the “deferred resignation” program is under dispute.
A large-scale worker reduction may significantly impact IRS operations.
Lawsuits have been filed against the resignation program.

IRS Faces Unprecedented Resignation Threat

Amidst stark internal discord, the Internal Revenue Service (IRS) is on the verge of significant upheaval. Reports disclose that around 20,000 workers—nearly a fifth of the entire agency—are planning to leave the organization under a contentious program called “deferred resignation.” This plan, pushed by the Trump administration, aims to streamline the federal workforce while offering financial packages to employees.

The deferred resignation initiative allows employees to maintain salary and benefits till September 30, provided they resign by the end of February. This conditional buyout strategy is stirring legal debates and has led to lawsuits filed by employee unions. They argue that it breaches the Anti-Deficiency Act and other federal regulations.

Adding to the discord, the IRS has been hit with a hiring freeze, reflecting an executive order from the Trump administration, further complicating the agency’s operational capacity. This freeze means paused job offers belonging to a substantial number of individuals who expected to contribute to IRS activities, especially during the critical tax filing period.

Implications of Workforce Reductions

The IRS intends to cut its workforce significantly, reducing from 102,000 to 60,000–70,000 employees, with major effects on taxpayer services and compliance. The downsizing will commence after the tax filing season, with employees receiving Reduction in Force notices bi-weekly.

“The Secretary is committed to ensuring that efficiency is realized while providing the collections, privacy, and customer service the American people deserve,” said a Treasury Department spokesperson.

These cuts arrive after years of workforce expansions introduced to enhance the IRS’s capacity to collect taxes efficiently under Biden. Critics argue these reversals may hinder the IRS’s ability to adequately fulfill its roles and could lead to reduced revenue collections, impacting government budgets.

Legal and Operational Challenges

The resignation wave comes on the heels of further controversies within the IRS, including controversial information-sharing agreements with Immigration and Customs Enforcement, causing privacy concerns. Alongside, is the ongoing influx of legal challenges disputing the structural changes and questioning their alignment with established legal frameworks.

“The deferred resignation program offers employees who opt into the program an exemption from any return-to-work requirements and full pay and benefits regardless of workload, with the expectation that most employees will transition their duties and be placed on administrative leave for the bulk of the deferred resignation period,” acting OPM Director Charles Ezell said.

The uncertainty surrounding the IRS’s capability to maintain its operational integrity amidst staff resignations is a pressing concern for stakeholders, warranting immediate attention to address potential policy missteps and safeguard public interests during this transition.