IRS Quietly Shifts Hiring Strategy After Massive Layoffs — What It Means for Taxpayers
Earlier this year, the IRS shocked the nation when it laid off 7,000 employees right in the middle of tax season. These weren’t just any workers; they were the people responsible for making sure taxpayers filed correctly, followed tax laws, and reported income accurately. By March, the agency had lost about 11% of its workforce. And the worst part? That was just the beginning.
By April, a memo warned employees of even deeper cuts: up to 40% of its workforce gone in just a few months. That would shrink the IRS from nearly 100,000 employees to as few as 60,000. The agency admitted in writing what many feared: taxpayer services and compliance would be “trimmed.” In other words, getting help with your taxes could become a lot harder.
But now, the IRS is making a very different move, and it’s raising some eyebrows.
The Hiring Twist No One Saw Coming
In July, after another report revealed the agency had lost 20% of its taxpayer service staff, the IRS quietly put out hiring notices for 4,500 new full-time service reps. It looked like the agency was finally reversing course.
But then something strange happened.
Those listings were quickly pulled down. In their place, the IRS announced a pivot: instead of full-time staff, it now plans to hire just over 2,150 frontline workers, and more than 70% of them are seasonal hires. These “term employees” can only stay on for a maximum of four years.
For a workforce already rattled by uncertainty, the change has set off alarm bells.
“Beware of a Bait-and-Switch”
Matt Hoffman, chief negotiator for the National Treasury Employees Union Chapter 66, issued a stark warning: workers should “beware of a bait-and-switch.”
Here’s why:
- Term employees lack job security. They can be let go when their appointment ends, with far fewer protections than permanent staff.
- They don’t gain career tenure. That makes it harder to qualify for promotions, transfers, or certain federal service rights.
- Conversion is tough. To even be considered for permanent status, seasonal employees must work at least two years successfully in a term role, and even then, there’s no guarantee.
As Hoffman put it, these new positions give the IRS “multiple ways” to let go of workers without technically firing anyone.
It raises a troubling question: Is the agency setting itself up with a disposable workforce?
The Bigger Problem: Taxpayer Services on the Line
The timing couldn’t be worse. In its fiscal 2026 budget request, the IRS said it needs $852 million to hire 11,000 call center reps just to maintain current phone service levels. Without that funding, the agency warned it could only answer about 16% of taxpayer calls during next year’s tax season.
Think about that for a second. If you’ve ever sat on hold with the IRS for hours, you know how bad it already feels. Now imagine nearly nine out of ten calls going unanswered.
And to make matters worse, the House Appropriations Committee just advanced a budget bill that doesn’t include the IRS’s request. Instead, it imposes even deeper cuts.
So, what happens when millions of taxpayers need help, but the agency doesn’t have the staff to answer?
AI to the Rescue… or a Recipe for Disaster?
The IRS has an answer. Sort of.
At a May hearing, U.S. Treasury Secretary Scott Bessent revealed the agency plans to lean heavily on artificial intelligence. Instead of rehiring seasoned employees, the IRS wants AI to step in and keep tax collections “robust.”
But here’s the catch: even Bessent admitted that replacing experienced staff with new hires rarely works. Training a top-level collections agent, he said, takes years, “like sending a junior high student to do a college-level class.”
If humans can’t be quickly replaced, can AI really handle the complexity of U.S. tax law?
What It All Means
The IRS is at a crossroads. After massive layoffs, it’s experimenting with short-term hires and artificial intelligence to fill the gaps. But this shift could leave taxpayers with fewer protections, fewer services, and fewer answers.
For employees, it means job security is on shaky ground. For taxpayers, it means next year’s tax season could be one of the most confusing and frustrating yet.
And for the IRS itself? The question lingers: is this bold new strategy the future of tax administration, or a ticking time bomb waiting to explode?
One thing is certain: come April, millions of Americans will find out the hard way.
