Earlier this year, the IRS turned heads when it decided to give thousands of workers the boot in the middle of tax season, sparking concerns over how it would handle tax returns.
In February, it fired 7,000 employees nationwide who were responsible for ensuring taxpayers followed tax laws, correctly reported their income, filed their returns, and more.
According to a report from the Treasury Inspector General for Tax Administration, the IRS had lost about 11% of its workforce by the following month.
In April, the IRS warned remaining employees in a memo that it plans to reduce its workforce by 40% within the next few months through layoffs and buyouts, shrinking headcount from about 100,000 employees to between 60,000 and 70,000.
A giant question mark now hangs over the future of free taxpayer services as the agency noted in the memo that “taxpayer services and compliance will need to be trimmed” due to the job cuts.
The IRS quietly makes a major change to hiring strategy
Shortly after another report from the Treasury Inspector General for Tax Administration in July revealed that the IRS has lost over 8,600 taxpayer services employees, about 20% of its workforce, the IRS put out hiring notices to fill 4,500 full-time contact service representative jobs.
However, according to a recent report from Federal News Network, those job listings, which were open primarily to current IRS employees or former federal workers, were quickly removed from USAJobs.
The IRS now seeks to hire over 2,150 frontline customer service positions, and more than 70% of those job posts are for seasonal hires that can’t remain at the position for more than four years.
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Chapter 66 of the National Treasury Employees Union, which represents IRS employees in Kansas City, is raising red flags about the negative impact of this drastic hiring change.
In a video message to union members, Matt Hoffman, chief negotiator for NTEU Chapter 66, said that employees should “beware of a bait-and-switch,” as some may have already applied for these positions before they became term-based.
“Going from a permanent to a term position or appointment means giving up job security and career status,” said Hoffman. “Term employees are hired for a fixed period and can be let go when that period ends, with far less protections against separation than permanent employees get.”
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He said that the IRS is recruiting seasonal hires for one-year terms, with the option to renew the terms for up to four years.
Hoffman warned that term positions don’t count toward career tenure, “making it harder to qualify for certain competitive service rights or transfer opportunities.”
Also, to be considered for conversion to full-time career status, seasonal IRS employees must complete at least two years of term appointment work, only if they are “fully successful” in their performance evaluations.
He also said it appears that the new term positions from the IRS are designed to “allow for temporary staffing flexibility” and have “multiple ways” for employees to be “let go without actually firing anyone.”
“This will greatly limit the employees their rights and their confidence in maintaining their newly acquired position,” said Hoffman.
The IRS is battling a growing problem that could soon impact taxpayers
The move from the IRS comes after it submitted a fiscal 2026 budget request that said it needs $852 million to hire 11,000 call center representatives to “maintain” its current level of phone service to taxpayers.
It warned that during tax season next year, it would only be able to answer about 16% of phone calls from taxpayers if it didn’t receive these funds.
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Earlier this month, the House Appropriations Committee advanced its fiscal 2026 spending bill without these funds. The bill also contained steeper IRS budget cuts than the Trump administration initially planned.
The dramatic IRS workforce changes result from the Trump administration’s goal to remove “unnecessary programs” and reduce “bureaucratic inefficiency” in the federal government.
According to recent data from Layoffs.fyi, so far this year, the Department of Government Efficiency (DOGE) has laid off over 67,000 government employees, and 178,296 federal employees have chosen to depart.
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Amid the IRS’ workforce shortage, it plans to use artificial intelligence to help maintain its ability to collect tax revenue.
During a House Appropriations Committee hearing on May 6, U.S. Treasury Secretary Scott Bessent said that the IRS will replace fired workers with AI.
“I believe through smarter IT, through this AI boom that we can use that to enhance collections, and I would expect that collections would continue to be very robust as they were this year,” said Bessent during the hearing.
He also said that replacing fired workers with new ones won’t be efficient, as it takes time for a person to become “a high-end IRS collections agent.”
“There is nothing that shows historically that by bringing in unseasoned collections agents that it results in more collections or high-end collections,” said Bessent. “It would be like sending in a junior high school student to try to do a college-level class. Becoming a high-end IRS collections agent is something that one grows into.”
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