IRS Looks to Cut 3,500 New Hires in Small Business Division (1)

The IRS is warning managers and employees that the termination of thousands of new workers is coming by the end of this week.

Over 3,500 probationary employees in the Small Business/Self-Employed Division will be terminated by the end of the week, leaders in the division said in an email sent to managers Wednesday and seen by Bloomberg Tax.

Managers are expected to receive their list of employees who will be let go Wednesday and those employees will be notified by the Human Capital Office Thursday, according to the email. Forbes first reported the division terminations.

The SBSE division was just one of several divisions heeding the Trump administration’s push to start firing many probationary employees who have less than two years of experience in the government.

The IRS gained around 10,000 employees in fiscal year 2024, according to the National Taxpayer Advocate annual report. The agency had gone on a hiring spree fueled by tens of billions of dollars Congress gave it in the 2022 tax-and-climate law to help it modernize and go after tax cheats.

The IRS didn’t immediately respond to a request for comment.

The probationary employees in the IRS Chief Counsel’s Office aren’t currently included in the ordered terminations impacting the agency, according to a Feb. 14 email seen by Bloomberg Tax.

The IRS chief counsel crafts regulations and other guidance, advises other divisions of the IRS during audits, and provides general legal services to the agency.

The National Treasury Employees Union, which represents about two-thirds of the IRS workforce, filed a lawsuit Feb. 12 asking a judge to rule that mass firings of probationary employees by the Office of Personnel Management, as well as its deferred resignation program, are unlawful.