IRS Halts Layoffs, Plans Rehire Amid Staffing Shortages

The Internal Revenue Service (IRS) under President Trump has abruptly halted its major layoff plan and is actively seeking to rehire employees to address critical staffing shortages ahead of the 2026 tax filing season. Earlier in 2025, the IRS aimed to reduce its workforce from over 100,000 to around 60,000, resulting in the loss of approximately 26,000 employees and the elimination of key offices, but these cuts led to concerns about operational capacity and customer service effectiveness. The agency is now rescinding deferred resignation agreements for hundreds of workers and reversing some firings, allowing affected employees to return without penalty amid fears that understaffing would hamper tax compliance and modernization efforts. This policy reversal reflects acknowledgment from Treasury and IRS leadership that previous reductions went too far, risking mission-critical expertise and the successful implementation of President Trump’s tax agenda, including the One Big Beautiful Bill. Congressional pressure and internal warnings about poor customer service response rates also contributed to the course correction. Overall, the IRS is prioritizing staffing adequacy to meet increased demands and ensure efficient tax administration.