IRS IT department has shrunk 42% under Trump

More than 2 in 5 IRS IT employees have either been separated from the agency or involuntarily reassigned to other positions during the second Trump administration, according to a watchdog report released last week.

In its third workforce snapshot since President Donald Trump began his second term, the Treasury Inspector General for Tax Administration found that the IRS lost 30% of its workforce (31,273 staffers) from January 2025 through January 2026, though it also added 2,000-some positions for a net decrease of 28%. Those departures were a mix of voluntary separations, deferred resignations or other incentive-induced exits.

Among the tax agency’s IT staff, 42% are gone, including 29% (2,497 individuals) who departed via separation or workforce reduction efforts. The remaining 13% (1,143 employees) were reassigned to the chief operating officer’s staff, per the report.

“According to the IRS, restructuring the IT department allowed them to simplify and align technical work with the agency’s mission and core functions,” TIGTA reported. “IRS officials stated that the reassignment was not performance-related but was done to support Chief Operating Officer responsibilities.”

Those non-IT responsibilities included the oversight of integrated support functions, implementing economy-of-scale efficiencies and facilitating better business practices, tax agency officials told the watchdog. 

The involuntary transfers to the COO’s office came amid a restructuring of the agency’s IT department last year that was kicked off by more than 1,300 IT workers taking a skills assessment, the report stated. According to the watchdog, those staffers “were told the results would establish a baseline understanding of their collective strengths and areas for development.”

“However, IRS officials later clarified this assessment was not related to the restructuring and was used to stress test assumptions related to employees’ readiness to compete with private sector peers in similar job functions,” TIGTA continued. “IRS officials also said that the assessment results were not used for any decision-making purposes.”

Appearing before the Senate Finance Committee on Tax Day, IRS CEO Frank Bisignano told lawmakers that the agency completed the “most successful filing season” in history thanks in large part to technology investments. He said staff cuts had no adverse effects on agency operations — an assertion heavily disputed by Senate Democrats. 

In an emailed statement to FedScoop, the IRS credited Bisignano’s leadership with “a successful filing season” and a reduction of backlogs alongside the implementation of tax changes via the administration’s One, Big, Beautiful Bill Act. 

“In addition to the filing season, the CEO is working to transform the IRS into a digital-first agency, which provides the best possible experience for taxpayers while improving collections and safeguarding privacy,” the IRS said.