The Trump administration’s tenure has been marked by several executive orders aimed at reducing the size of the federal government’s workforce. On May 2, 2025, the Treasury Inspector General for Tax Administration (TIGTA) released a report on IRS workforce reductions as of March 2025.
In February 2025, the IRS had approximately 103,000 employees. By March, more than 11,000 IRS employees either received termination notices during their probationary employment period or were approved for the Deferred Resignation Program (DRP), which allowed federal employees to resign but retain their pay and benefits through September 20, 2025. The loss of employees represented an 11% reduction in the agency’s workforce. The separations disproportionately impacted employees in certain positions. Approximately 31% of revenue agents separated, while only 5% of information technology management separated.
Similarly, the separations impacted certain business units more than others. The Tax-Exempt and Government Entities (TE/GE) Division has seen the largest percentage reduction in workforce among all of the IRS business units. Prior to the reduction efforts, TE/GE had a staff of 2,239. As of March, there had been 694 departures, which represents a decrease of 31% of the workforce.
As the report only covers reductions through March, it does not include the effects of three additional voluntary separation programs that were reported in April. The primary additional program is the Treasury Deferred Resignation Program (TDRP), which will largely mirror the benefits offered by the first DRP. The TIGTA reports that more than 23,000 IRS employees have applied for the TDRP. As of the end of April, more than 13,000 of those applications had been approved. Once the additional voluntary separation programs are complete, the percentage decrease in TE/GE agents will rise.
If you have any questions on the potential impact of the Tax-Exempt/Government Entities workforce reduction, please contact Sarah Piot or Erin Wood.
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The Schneider Downs Government industry group addresses the very specific accounting and financial needs, challenges and requirements of the broad spectrum of public sector entities. We advise a range of government entities, including—but not limited to—boroughs, charter schools, counties, cities, government agencies, municipalities, public schools, private schools, townships and villages.
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