DOGE Cuts IRS Workforce by Over 25 Percent

The Department of Government Efficiency, led by Elon Musk, reduced the Internal Revenue Service workforce by more than 25 percent, cutting staff from an original 100,000 employees. The agency plans to hire 8,000 new employees to stabilize its workforce at approximately 74,000 by the end of 2026.

IRS Chief Executive Officer Frank Bisignano described the 2026 filing season as a historic success and reported $2 billion in IT budget savings achieved by eliminating wasteful contracts. However, former acting Commissioner Douglas O’Donnell warned that these reductions will impair the agency's long-term mission. O'Donnell argued that cutting personnel before completing digital modernization reverses progress and diminishes enforcement capabilities, especially within the corporate sector.

Financial pressures continue to mount as the annual discretionary budget is projected to fall from $12.2 billion in fiscal 2025 to $9.8 billion by fiscal 2027. These budget constraints have already led to the scrapping of the Direct File program.