The IRS is Downsizing: Key Divisions Most Affected in 2025

By now, everyone has heard the stories of the Internal Revenue Service (“IRS”) workforce being slashed significantly. The IRS started 2025 with just over 102,000 employees. As of mid-2025, the IRS has just under 76,000 employees (including employees who took an early resignation offer but are still considered “employed” through September 2025), according to a report from the National Taxpayer Advocate.

The three IRS divisions suffering the largest decreases in the number of employees are:

1. Taxpayer Services – from 42,134 to 33,053 employees, a decrease of 9,081 employees
2. Small business/Self-Employed – from 24,120 to 15,566 employees, a decrease of 8,554 employees
3. Information Technology – from 8,647 to 6,316 employees, a decrease of 2,331 employees

The three IRS divisions suffering the largest percentage decreases in employees are:

1. Transformation and Strategy Office – from 80 to 4 employees, a 95% decrease
2. Chief Tax Compliance Officer – from 10 to 1 employee, a 90% decrease
3. Direct File (a program that the current administration intends to discontinue) – from 27 to 5 employees, an 81% decrease

These cuts already have, and will continue to have, an impact on the IRS’ ability to provide services to taxpayers and to meet its obligations. The question is to what extent these cuts will impact these services.