IRS layoff notices to employees delayed by ‘glitches’

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IRS layoff notices to employees delayed by ‘glitches’

IRS employees told Federal News Network that RIF notices slated for several offices didn’t go out last Friday as planned.

Jory Heckman@jheckmanWFED

April 23, 2025 12:52 pm

3 min read

An IRS senior leader says recent ‘issues’ and ‘glitches’ are holding up widespread layoff notices from going out to employees.

Federal News Network first reported that the IRS planned to start sending bi-weekly Reduction in Force (RIF) notices last week, with the goal of cutting up to 40% of its total workforce.

The IRS started this year with 102,000 employees, but it would have about 60,000 to 70,000 employees after completing its workforce cuts.

But several IRS employees told Federal News Network that RIF notices slated for several offices didn’t go out last Friday as planned.

Some speculated that recent turnover in IRS leadership contributed to the delayed RIF notices.

But in an email sent Tuesday, acting IRS Deputy Chief Operating Officer A. Stewart Pearlman said the layoffs will continue as planned.

“The RIF has not been paused at this time. There were some issues/glitches last week that held us up from issuing notices. There are lots of discussions going on daily but we are not pausing the RIF at this time,” Pearlman wrote in an email obtained by Federal News Network.

Pearlman wrote the email in response to a message that was forwarded to him, with the subject line “RIF is paused – update.”

Before Pearlman’s email, several employees received an email from an IRS attorney, claiming the RIF has been “temporarily paused,” at the direction of acting Commissioner Michael Faulkender.

“While we don’t know the timeframe of the pause, there is speculation that this pause may be a year or two to give time to analysis [sic] the IRS more deeply,” the IRS attorney wrote.

Faulkender, who also serves as the deputy Treasury secretary, took over as the acting commissioner last week, after President Donald Trump removed IRS criminal investigator Gary Shapley as the agency’s acting leader.

Another acting IRS commissioner, Melanie Krause, left the agency earlier this month over a deal to share immigrants’ tax data with Immigration and Customs Enforcement.

A fourth acting IRS commissioner, Doug O’Donnell, who permanently served as the agency’s deputy commissioner, retired in February.

Meanwhile, the Washington Post reported last week that the IRS rescinded building and systems access for Gavin Kliger, a Department of Government Efficiency (DOGE) official who also oversaw workforce cuts at the IRS and the mass firing of employees at the Consumer Financial Protection Bureau

Treasury Department and IRS employees, like much of the federal workforce, were given a second chance to sign up for a “deferred resignation offer” to go on paid administrative leave through the end of the fiscal year.

Some Treasury and IRS employees had until April 14 to accept the offer. But in compliance with the Older Workers Benefit Protection Act, employees over age 40 have 45 days to consider the offer.

More than 20,000 IRS employees have applied for the second “deferred resignation” offer so far.

But the IRS is preventing many employees from accepting the offer because their work is deemed “critical” to its operations. The IRS is exempting some enforcement personnel, but these exemptions are not across the board.

An IRS official told Federal News Network that the agency denied deferred resignation applications from 1,700 employees in its Large Business and International (LB&I) division.

Among those denied were probationary employees, mostly fired in mid-February.

Bloomberg Tax first reported that the IRS denied deferred resignation to 2,100 employees — about 10% of the 20,000 employees who applied to take the offer.