a hobbled agency could have trouble meeting revenue goals and basic taxpayer services.
by 卡塔尔世界杯常规比赛时间 research
the internal revenue service is reeling from massive trump administration staffing cuts, which have left the agency knee-capped with nearly 26,500 fewer employees, raising red flags for tax professionals about service quality, enforcement consistency and case resolution delays.
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the irs has lost 25.9 percent of its workforce since jan. 25, 2025, with headcount dropping from 102,113 to 75,702 as of june 4, 2025. most of the cuts come from voluntary separation incentives rather than layoffs, according to the national taxpayer advocate 2026 objectives report to congress.
yet, the result is the same: fewer agents, auditors, and call center staff, just as tax complexity and demand for support are expected to increase.
irs workforce reductions by division |
staff before (jan. 25, 2025) |
staff after (june 4, 2025) |
change |
percent change |
|---|---|---|---|---|
small business/self-employed (sb/se) |
24,120 |
15,566 |
-8,554 |
-35.5% |
independent office of appeals |
1,775 |
1,275 |
-500 |
-28.2% |
taxpayer services |
42,134 |
33,053 |
-9,081 |
-21.6% |
taxpayer advocate service |
1,970 |
1,480 |
-490 |
-24.9% |
information technology |
8,647 |
6,316 |
-2,331 |
-27.0% |
total irs |
102,113 |
75,702 |
-26,411 |
-25.9% |
the irs slashes staffing across key divisions, with small business/self-employed, appeals, and taxpayer services among the hardest hit.
the declines are steepest in some of the divisions most relevant to cpa firms and their clients. the small business/self-employed (sb/se) division, which serves millions of small businesses and sole proprietors, shed more than 8,500 employees, or 35.5 percent of its workforce. the independent office of appeals, vital for tax controversy and dispute resolution, dropped 28.2 percent. the taxpayer services division, responsible for phone support and processing, fell 21.6 percent.
irs separation programs utilized |
employees exited |
|---|---|
deferred resignation program (drp) 1.0 |
4,433 |
treasury deferred resignation program (tdrp) 2.0 |
17,562 |
voluntary early retirement / separation incentives |
1,475 |
other (resignation, termination, death) |
2,941 |
total |
26,411 |
most of the agency’s 26,000 personnel losses come from voluntary exits under federal separation incentives.
even the taxpayer advocate service itself wasn’t spared, losing 490 positions, or about 25 percent of its staff.
“the magnitude of these workforce reductions has presented significant challenges,” national taxpayer advocate erin m. collins says. she points to the loss of front-line staff and experienced managers and leaders who took early retirement offers.
irs operating divisions: top 10 by job cuts |
job loss |
|---|---|
taxpayer services |
9,081 |
small business/self-employed |
8,554 |
information technology |
2,331 |
human capital office |
848 |
appeals |
500 |
taxpayer advocate service |
490 |
research, analytics & statistics |
178 |
facilities management |
318 |
large business & international |
1,361 |
online services |
123 |
irs reductions are concentrated in frontline divisions—taxpayer services and sb/se accounted for more than two-thirds of all cuts.
the ripple effects are already evident. identity theft victim assistance cases take an average of 20 months to resolve, with 387,000 such cases pending. processing delays, slow phone responses, and backlogs in correspondence are straining the irs’s ability to deliver consistent taxpayer service.
for cpa firms, clients will likely face longer wait times, more automated notices, and fewer opportunities to resolve disputes efficiently. the independent office of appeals, down nearly 500 employees, may be unable to keep pace with case filings, while sb/se exam functions may see audit activity decline or shift focus.
federal separation programs, including deferred resignation, voluntary early retirement, and treasury buyouts, drove the staffing reductions. over 22,000 staff exited through these channels, with another 2,941 leaving through resignations, terminations, or death.
identity theft victim assistance (idtva) workload |
value |
|---|---|
pending idtva cases |
387,000 |
average resolution time |
602 days |
percent of affected taxpayers below 250 percent fpl |
69% |
with nearly 400,000 unresolved cases, identity theft resolution times now exceed 600 days on average.
the taxpayer advocate warned that additional trouble could arise if congress follows through on proposed cuts to irs appropriations. the biden administration’s budget anticipates a 20 percent reduction next year and a 37 percent cut once the inflation reduction act funding winds down.
in response, collins urged lifting the irs’s current hiring freeze and restoring direct hire authority to allow the agency to bring on seasonal workers in time for the 2026 filing season. “especially in the short term, the number of total irs employees is less important than the number of trained irs employees,” she wrote.
future budget outlook |
projected reduction |
|---|---|
appropriated irs funding (fy 2026) |
-20% |
total irs funding post-ira wind-down |
-37% |
congressional proposals would slash irs funding further, compounding the agency’s staffing and service challenges.
for cpas, this environment calls for proactive client management, including setting expectations around processing times, encouraging digital communication and filings, and preparing for a potentially rockier resolution path when issues arise. it may also elevate the strategic value of authorized representation and advocacy when navigating irs bureaucracy.
the message from the taxpayer advocate is clear: without reinvestment in staffing and modernization, the irs may be unable to meet even its core mission. and that shortfall lands squarely on the desks of accountants, tax preparers, and their clients.