The Internal Revenue Service will reinstate thousands of employees it fired earlier this year. This move follows recent federal court orders declaring the terminations unlawful. The reinstatement comes just one day before the April 15 tax filing deadline, one of the busiest times of the year for the agency.
Court Orders Force IRS to Rehire Staff
About 7,000 probationary employees terminated in February will have the option to return to work. Acting IRS Commissioner Melanie Krause shared this update during an internal call with staff.
An official email sent to those employees stated:
“You are receiving this email as one of approximately 7,000 probationary employees who were separated from service and have been reinstated in compliance with recent court orders.”
Previously, these employees were placed on paid administrative leave. However, judges ruled that this did not meet the requirements of the court’s injunction.
Judges Reject “Administrative Leave” Workaround
U.S. District Court Judge William Alsup criticized agencies for using paid leave to sidestep the ruling. He said that putting employees on leave does not restore the services intended by the court.
Meanwhile, another judge, James Bredar, ordered 17 federal agencies to rehire affected employees. His ruling applies to workers in 19 states and the District of Columbia. Both court decisions stem from a legal challenge that said the firings were coordinated improperly by the Office of Personnel Management (OPM).
What Returning IRS Employees Can Expect
Those who return by April 14 will receive instructions on:
- Obtaining a Personal Identity Verification (PIV) card
- Getting workspace assignments
- Receiving IT equipment
In some cases, employees may be allowed to temporarily telework if no office space is available. Additionally, the IRS said that returning workers can keep outside jobs if they submit an official request for approval.
Employees who do not wish to return can choose to resign by emailing the agency directly.
Why It Matters for the IRS
These reinstatements come during a major downsizing effort at the IRS. The agency has already eliminated between 11,000 and 12,000 jobs, which accounts for about 12% of its total workforce. Another round of cuts is expected in mid-May, shortly after tax season ends.
Earlier reports suggested the IRS could cut up to 50% of its staff. However, more recent estimates place that figure closer to 20%.
Experts say these cuts could damage IRS operations. For instance, Kelley Reyes, head of the Professional Managers Association, warned that losing skilled workers would hurt long-term performance. Likewise, former IRS manager Jeff Eppler said deeper cuts could delay service for taxpayers filing after April 15.
Why Cutting IRS Staff May Cost More Than It Saves
The Department of Government Efficiency (DOGE), backed by the Trump administration, is driving the push to reduce IRS staff. Their goal is to cut government spending. However, some experts say the move could backfire.
According to a Yale University Budget Lab report, firing 18,200 IRS workers could save $1.4 billion. But it would cost the federal government $8.3 billion in lost tax revenue. Over 10 years, the net loss could reach $159 billion.
IRS staff cuts also shrink enforcement efforts. As a result, the tax gap—the difference between taxes owed and collected—may increase significantly.
Scams Rising Amid IRS Uncertainty
As the IRS downsizes, scams targeting taxpayers are on the rise. AARP Pennsylvania warned that scammers are pretending to be IRS agents. They often demand payment or personal data using threats.
Common red flags include:
- Unsolicited calls, emails, or texts
- Threats of arrest or legal action
- Requests for payment via gift cards or cryptocurrency
AARP recommends using the official IRS.gov website to verify any messages and urges people to avoid sharing information over the phone.
Final Reminder
The IRS must reinstate employees by April 14, or it risks being held in contempt of court. While the agency prepares to bring thousands back, another round of layoffs could soon follow. For taxpayers, this means ongoing changes in how the IRS operates during a critical filing season.
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