It is no secret that the IRS has undergone some dramatic workforce changes over the past few months, threatening tax returns and the future of free taxpayer services.
The agency raised eyebrows in February when it fired 7,000 employees, which impacted tax compliance workers. These employees were responsible for ensuring taxpayers follow tax laws, correctly report their income, file their returns, etc.
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The IRS reportedly later emailed a few of the workers it fired to inform them that they could return to work full-time on April 14, the day before the deadline for Americans to file their taxes.
Related: Free IRS services taxpayers love face a major threat
A day after the tax filing deadline passed, the IRS sent a memo to employees informing them that it is planning to shrink its workforce by 40% through layoffs and buyouts. The cuts are set to happen in two phases, the first one began last month, and the second one will start in August.
Some IRS departments, including those that operate free taxpayer services, will be more affected by the cuts than others.
The Tax Withholding Estimator is a free IRS tool that can help you figure out your federal income tax withholding.
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IRS sends a stern email to employees
As the IRS shrinks its workforce, it has sent another memo to some employees warning them that they will be expected to work mandatory weekend overtime hours, according to a new report from Federal News Network.
On the weekends of May 10 and May 17, employees in the IRS Input Correction Operation (ICO) department at the agencyâs Kansas City office will be required to work eight hours of overtime each day. The ICO department is responsible for resolving tax return errors flagged by the IRSâ Error Resolution System (ERS).
Related: IRS makes a drastic decision that could impact tax returns
The memo states that âALL minimally and fully successfulâ ICO employees will be required to complete the 16 hours of overtime. Employees can work overtime on weekdays, but it is ânot part of the required 16 hoursâ of weekend overtime.
âRemember, if we do not make a sizable dent in the ERS rejectsâŠinventory, there is the possibility of additional required overtime,â wrote IRS Operation Manager Latifah Hisham in the memo.
IRS suffers a major loss
The move from the IRS comes after it lost about 11% of its workforce in March, according to a new report from the Treasury Inspector General for Tax Administration.
The report also revealed that about 31% of IRS revenue agents, who are responsible for performing audits, have either been fired or accepted a buyout offer during the first three months of 2025.
The loss of IRS workers comes as Elon Musk, who runs the Department of Government Efficiency (DOGE), and President Donald Trump have been on a mission to shrink the federal government through job cuts.
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Their main goals are to âeliminate unnecessary programsâ and âreduce bureaucratic inefficiency,â according to a recent executive order.
Recent data from Layoffs.fyi shows that so far this year, DOGE has laid off over 61,000 government employees, and 171,843 federal employees have chosen to depart.
For the IRS specifically, Trump is reportedly planning to abolish the agency and replace it with a service that collects revenue from tariffs (taxes companies pay to import goods from overseas). This would fund the U.S. government, according to U.S. Secretary of Commerce Howard Lutnick.
âDonald Trump announced the External Revenue Service, and his goal is very simple: to abolish the Internal Revenue Service and let all the outsiders pay,â said Lutnick in an interview with Fox News in February.
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