Discarded IRS Workers Enter a Market Hungry for More Accountants

Accountants and auditors being purged from the IRS are entering a labor market desperate for their experience and know-how in complex areas of corporate and international tax.

State regulators, public accounting firms, and Fortune 500 companies are among employers in need of skills that former Internal Revenue Service staffers who have already left the agency could deliver. While a Trump administration plan to lay off as much as half the IRS workforce risks gutting critical services like enforcement and taxpayer support, the upheaval could boost an accounting industry that has struggled to train and retain talent.

“There is a shortage of this type of expertise. There is a shortage of accounting professionals at large,” said Frances Moreno, co-founder and managing partner of staffing firm Vaco Los Angeles. “It’s sure for these talented people to get reabsorbed into our openings,” said Moreno, who works with California-based job hunters.

As many as 12,000 IRS workers have been forced out through Trump administration adviser Elon Musk’s “deferred resignation” plan and the removal of federal probationary employees. Thousands more could join them.

As many as half of all IRS workers could be cut under a Trump administration plan, flooding the jobs market with tax and accounting professionals.

The agency employed roughly 100,000 workers in January, most of them filling customer service roles or providing seasonal assistance. Thousands of them, however, are auditors, revenue officers, and other skilled specialists.

Career Choices

IRS workers who lose their jobs will have options. Many are expected to return to the Fortune 500 jobs they left to join the federal tax agency—swapping bigger paychecks for the flexibility to work from home, limited overtime and what they thought would be long-term job stability, Moreno said.

Others may choose to set up their own business, consulting with large companies on their corporate tax compliance. This would allow those workers to control their hours while maintaining the flexibility to work from home. Some might return to public accounting, Moreno said.

The accounting industry shed 340,000 workers in the wake of the coronavirus pandemic, falling to employment levels not seen since 2010, before partially rebounding last year. Similarly, the number of employed tax examiners, collectors and revenue agents shrunk 15% between 2019 and 2024, according to federal workforce statistics.

Accounting leaders have responded to what they consider a severe talent shortage by pursuing licensing reforms that would reduce the minimum education requirements to earn the certified public accountant credential. Virginia is poised to join Ohio in adopting the reforms while states from Georgia to Hawaii weigh similar changes.

Accounting firm EisnerAmper said it would consider any qualified candidate to fill openings in its tax practice.

“Professionals with IRS experience are often highly sought after by accounting and business advisory firms,” said Miri Abrams Forster, partner and tax controversy leader at EisnerAmper.

Larger firms including the Big Four—Deloitte, Ernst & Young, KPMG and PwC— plus Grant Thornton, BDO and RSM US either declined to comment or did not respond to requests for comment.

States Ready to Hire

New York tax regulators have already started interviewing former IRS workers and expect to bring on a dozen or more auditors in the coming days. Most of those applicants previously worked for the state’s Department of Taxation and Finance but were lured to the federal government during an expansion of the IRS in the Biden administration, said Darren Dopp, an agency spokesperson.

The exodus, retirements, and other recruiting challenges left the 3,800-person tax department short roughly 400 people last year, after the federal agency received billions in supplemental funding from the 2022 tax-and-climate law sparking a hiring spree.

Both New York and Pennsylvania have launched initiatives meant to fill state jobs with federal workers losing their jobs under the current downsizing. Pennsylvania Gov. Josh Shapiro (D) signed an executive order this week aimed at filling 5,600 vacancies across the state workforce, including open positions for auditors.

Pennsylvania has about 170 vacancies across its 1,800-person Department of Revenue and is looking for field enforcement agents, tax examiners, and call center specialists, said spokesperson Jeffrey Johnson.

The influx of new talent is critical to the state agency as it braces for a retirement boom. More than 20% of its workforce will be eligible to retire in the next four years, Johnson said.

“The states are always looking for talent and when there are a lot of talented people looking for work, the states will always step in,” said Josh Winfrey, deputy executive director of the National Association of State Auditors, Comptrollers and Treasurers.

States are having an easier time recruiting new talent as both the private sector and federal government have cut staff, Winfrey said.

Seeking a Broader Fix

The pandemic-era “great resignation” hit the accounting industry hard, forcing the largest US firms to repeatedly increase wages to compete for new talent and stem rapid turnover. However, firms cut staff in 2023 and again last year as turnover and demand for advisory services slowed.

While the fresh job-seekers could benefit employers that have struggled to find accountants, they are no cure for the profession’s ongoing challenge in recruiting future accountants, said Josh McGowan, director of the Carr School of Accountancy at Troy University.

The key, he said, starts much earlier in the process: convincing high school students to earn their accounting degrees and join the profession’s ranks with higher starting pay and a modern vision for the role of accountants.