IRS still looking for hundreds of IT assets assigned to former employees

Hundreds of digital devices assigned to IRS employees who exited the agency during the early months of the second Trump administration still haven’t been located, a new watchdog report found.

According to an audit by the Treasury Inspector General for Tax Administration, the 22,000 staffers who left the tax agency via deferred resignation or voluntary separations from April-July 2025 were assigned more than 32,000 IT assets.

Most of those assets — laptops, portable printers, smartphones, etc. — were returned to the IRS, TIGTA reported. But as of November 2025, the watchdog identified 1,308 missing assets, roughly 4% of the total.

TIGTA shared that information with the IRS and recommended its IT unit “perform a reconciliation” and then update its management system. Per the new report, the tax agency located hundreds of those devices but was still on the hunt for 594 assets as of April.

“While IRS policy requires assets to be returned upon departure, it does not include any specific time frame requirements,” TIGTA wrote. “We found the lack of guidance contributed to the inaccuracy of the asset inventory as of November 2025. In addition, the lack of reconciliation processes to ensure that assets were returned by departing employees also impacted the accuracy of the inventory.”

The IG called out a handful of issues that likely contributed to the asset-collection issues: managers who claimed devices from departing staffers didn’t return them to the local IT office; local IT offices failed to ship the assets back to headquarters; and IT depot workers didn’t update the statuses of outstanding assets once they were back in the fold.

TIGTA also dinged the tax agency for not having a policy for recouping the costs of unreturned assets. 

“Therefore, there are no consequences if a departing employee does not return their assets,” the watchdog wrote. “Failing to collect assets from departing employees results in a financial loss to the agency. In addition, the IRS is unable to reuse the assets, potentially causing the agency to purchase new assets for other employees.”

Officials with the IRS’s hardware asset management division shared evidence with TIGTA that showed there were no instances of ex-staffers accessing the agency’s network. Those officials also told the watchdog’s Office of Investigations that some assets were stolen, but additional documentation was not provided to TIGTA, the report noted.

“As these employees have separated from the IRS, we believe these assets should be considered stolen as opposed to missing,” the watchdog wrote. “The IRS cannot locate the items, and they have no evidence that the assets were returned by the employees. These assets place the IRS at risk of data loss as the hard drives of laptops and memories of smartphones have not been cleared and could contain sensitive taxpayer information.”

TIGTA made four recommendations to the IRS, urging the agency to update its device-return policy with concrete timeframes, take specific steps to locate stolen assets, add data to its audit trail repository, and strengthen audit trail policies with responsibilities assigned to system administrators. The IRS agreed with all four recommendations.

The public release of Thursday’s report follows previous TIGTA investigations into how the IRS handled its massive staff exodus. Earlier this month, the watchdog reported that thousands of agency staffers who were on administrative leave still had access to IRS systems.