U.S. Treasury Secretary Scott Bessent speaks to reporters at the U.S. Capitol as Republican lawmakers struggle to pass U.S. President Donald Trump’s sweeping spending and tax bill, on Capitol Hill in Washington, D.C., U.S., June 27, 2025. REUTERS/Elizabeth Frantz

The Internal Revenue Service (IRS) has dramatically reversed course, shelving widespread layoffs under President Donald Trump's administration and scrambling to refill mission-critical roles, Government Executive reported Thursday.

In June, the agency was still targeting a workforce reduction to below 60,000 staff, after peaking at over 100,000 under the Biden administration. But now, the focus has shifted to plugging gaps through hiring, reassignments, and revoking certain deferred-resignation offers, per the report.

The decision was confirmed to the outlet by two informed sources.

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The report said this development "marks a significant reversal for an agency that has shed about a quarter of its staff and had earlier this year planned to issue widespread reductions in force."

“IRS has identified areas where staffing reductions created a potential gap in mission critical expertise,” agency HR leaders told managers in a Wednesday email, according to Government Executive.

“As a result, IRS will utilize all available tools—including details, reassignments, DRP/TDRP rescissions, and external hiring—to identify resources to fulfill the mission critical skill sets," the email said, according to the report.

The message signals a lifeline for employees who accepted deferred resignation offers — they may return without penalty, though opting out remains voluntary.

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The reversal comes amid a steep exodus, with more than 26,000 IRS employees gone between January and May.

The report further noted that the warning signs were loud and clear earlier this summer, when the National Taxpayer Advocate flagged the staffing cuts as a potential threat to the 2026 filing season. IT workforce reductions also jeopardized the agency’s modernization plans.

Some employees are already feeling the impact: around 50 staff from the Taxpayer Experience Office, previously facing layoffs, were recently told those notices were rescinded. Their unit is dissolved, but they remain on payroll and are being reassigned across the agency.

Leadership shifts further underscore instability. IRS has had seven different leaders so far this year; the latest ousted include the director of online services, while the most recent permanent head lasted just two months.

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Treasury Secretary Scott Bessent is now the acting IRS commissioner — the sixth in office this year.