IRS Suffers Another $20B Budget Cut Published March 17, 2025
The continuing resolution that the Senate narrowly approved last Friday and President Trump signed on Saturday included a $20.2 billion cut in the Internal Revenue Service’s budget, the third such cut since 2023, clawing back over three-fourths of the $80 billion that the IRS was supposed to receive over 10 years from the Inflation Reduction Act of 2022. The agency is now planning to pause its technology modernization efforts.
The budget reduction occurred as the Trump administration and the Elon Musk-led U.S. DOGE Service have already begun layoffs at the embattled agency, with between CNN, 6,700 probationary employees at the IRS have been laid off, and 4,700 accepted the voluntary buyout offer 6,000 and 7,000 employees cut from its ranks. According to from the Office of Personnel Management’s “Fork in the Road” memo, also known as the “deferred resignation program.” However, IRS employees who accepted the buyout continue working through May 15, a month after the April 15 tax filing date, unlike other federal employees, and the buyout program closed as of Feb. offer have been told to 12.
After the resignations of former IRS commissioner Danny Werfel, who stepped down shortly before Trump’s inauguration, and the Doug O’Donnell, the new leadership at the IRS has reportedly been making plans for staff reduction of abrupt retirement of acting commissioner up to 50%. That percentage now seems to have been revised down to a unclear what the final number will be in the staff reductions. In January, the IRS reportedly had reduction of about 20% of the agency’s workforce by May 15. However, it’s unclear what the final number will be in the staff reductions. In January, the IRS reportedly had over 100,000 employees, according to the Federal News Network.
“I’ve seen numbers of 20%, I’ve seen numbers of 30%, I’ve seen numbers of 50%,” said Tax Guard CEO Hansen Rada. “It’s really difficult to tell what is true, and I don’t think anybody knows, because the proposal has been private, so there is definitely a giant question mark as to how strong the IRS will be going forward.”
