IRS layoffs underway around the country as millions prepare to file taxes

(WASHINGTON) — The Internal Revenue Service on Thursday began laying off more than 6,000 new and newly promoted employees across the country, sources familiar with the planning told ABC News, as part of President Donald Trump’s campaign to shrink the federal workforce that could have potential consequences for the current tax filing season.

The layoffs, impacting roughly 6%-7% of the agency’s 100,000-person workforce, began midday Thursday primarily outside the Washington, D.C., area, with thousands of employees facing layoffs at offices in Texas, Florida, Pennsylvania, Georgia, Tennessee, New York, and beyond, sources told ABC News.

As of Thursday morning, over 500 terminations were expected in Texas; over 600 in New York; over 400 in Georgia; and over 300 in each Florida, Tennessee, and Philadelphia, one source said.

Layoffs could continue into Friday at some IRS offices around the country if weather conditions prevent managers and employees from getting to work, according to an email sent to managers of probationary employees and obtained by ABC News.

The layoffs arrive in the middle of tax season as millions of Americans are filing their returns and hoping for timely refunds — but the exact impact on filing season is not yet clear.

Teams within the IRS being impacted by the layoffs include members of the small business/self-employed unit and clerks in various units, sources told ABC News.

Also impacted are members of the appeals team, whose role is to “resolve disputes, without litigation” with taxpayers, according to the IRS website, as well as employees with the Taxpayer Advocate Service, an independent organization within the IRS that helps to “protect taxpayer rights” and advocate for taxpayers who have issues with the IRS or are experiencing financial hardship.

Ahead of the layoffs, the IRS combed through an initial list of approximately 15,000 probationary employees to try to ensure that no one being laid off this week plays a “direct” role in filing season, sources said. But there are still widespread concerns within the IRS that the firings could ultimately cause delays:

One former IRS commissioner told ABC News it’s “unrealistic” to think firings could occur during filing season and that the process would still run entirely smoothly.

“The bottom line: Forever, it has been an absolute rule of thumb that you keep things stable during filing season. Because it’s delicate,” the former commissioner said. “And the idea that nearly 10% of the entire IRS workforce is being laid off right in the middle of filing season is extremely risky.”

The former commissioner said filing season is like an assembly line with incoming and outgoing products: there are incoming tax forms and correspondence, and outgoing credits, refunds, and balance-due notices.

“There are layers of indirect support that go into that — that could be technology, other types of logistics, supply chains. If you lose that capacity, it will diminish productivity,” the former commissioner said. “Filing season is all hands on deck. Something could break down. You could need to surge resources to one area of service. Things don’t always go as planned at the assembly line.”

“We can expect Americans to experience a return to slower refunds, to longer waits on hold, to dropped calls,” Vanessa Williamson, senior fellow at the Tax Policy Center, said on a call with reporters Thursday. “It’s going to be a real impact on customer service right as taxes are due this year.”

One probationary worker expecting to be fired told ABC News that “termination of probationary employees could prolong audits.”

Another agency official said morale at the IRS is “low” and that they expected remaining workers to “protest internally in ways that could impact filing season.”

On Thursday morning, a union representing IRS employees distributed a letter to members with instructions on what to do if they receive a termination letter.

“Print out everything in your Employee Personnel File that verifies when you started your job,” the email said. “Print last three paystubs and W-2. Print your annual appraisal. Keep your printed copies at home.”

An IRS spokesperson did not respond to a request for comment from ABC News.

Sources told ABC News that they expect further layoffs after tax season, and senior Trump administration officials have said that Trump wants to dismantle the tax-collecting agency entirely, which would require congressional approval.

“His goal is to abolish the Internal Revenue Service and let all the outsiders pay,” Commerce Secretary Howard Lutnick said on Fox News Wednesday night, referencing Trump’s proposal to create an “External Revenue Agency” to collect tariffs on foreign imports.

Experts say that abolishing the IRS would be extraordinarily difficult, and that it’s the sole government agency that collects the taxpayer money Trump is using to pay for his priorities, including border enforcement.

The IRS also would have to oversee any repayments to taxpayers envisioned by Trump and DOGE head Elon Musk, who recently floated the idea that Americans should receive a percentage of savings from the widespread government cuts.

“I love it. A 20% dividend, so to speak, for the money that we’re saving by going after the waste, fraud and abuse and all of the other things that are happening,” Trump said this week. “I think it’s a great idea.”

The cuts come two years after the IRS received tens of billions of dollars in funding from the 2022 Inflation Reduction Act, which the agency said helped it hire more customer service representatives — thereby cutting in half the average time needed to process taxpayer correspondence from 7 months to 3.5 months.

At the end of fiscal year 2024, the IRS employed a total of 100,433 people — including accountants, managers, lawyers and other staff — which was up from about 90,000 the year before.

ABC News’ Anne Flaherty and Elizabeth Schulze contributed to this report.

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