IRS poised for thousands of layoffs as Trump cost-cutting efforts continue

The scope and pace of cost-cutting and efficiency initiatives launched under the Trump administration in its first month has surprised even the most optimistic of the president's supporters, and it appears that no agency is immune from going under the microscope.

Starting Thursday, the Internal Revenue Service (IRS) appeared slated to become the next area to receive significant attention, with roughly 7,000 probationary employees poised for layoffs, as Fox News reports.

IRS slated for cuts

According to the outlet, the layoffs at the revenue agency would impact workers who have been on the job for one year or less and, therefore, remain on probationary status.

Such individuals will not have built up sufficient service time to qualify for the full complement of civil service employment protections.

Fox News cited a Reuters report indicating that the anticipated job cuts would amount to nearly 7% of the agency's workforce, which currently stands at around 95,000.

An insider with knowledge of the situation told Reuters that the cuts would affect a host of different job functions and roles, including IT staff, specialized audit personnel, and revenue agents.

Critics raise concerns

News of the imminent IRS layoffs spurred criticism from those who suggested that the timing -- just shortly after the start of the tax filing season – was a recipe for disaster.

As CNBC noted, Democrats on the Senate Finance Committee cautioned on Tuesday that the level of cuts being floated by the Trump administration would bring about a “tax refund train wreck” in terms of delayed refunds and the like.

However, Tom O'Saben, director of tax content and government relations at the National Association of Tax Professionals offered a rather less-alarmist take on the situation, stating, “If you have a good submission, you may not notice any change,” meaning that returns that are electronically filed, accurate, complete, and without complications were unlikely to be affected by staffing adjustments.

Even so, O'Saben acknowledged that some delays are probably inevitable, adding, “We haven't seen any service delays yet. But we're going to. It's just going to be a reality with less people.”

California tax attorney Adam Brewer told CNBC that the best course of action is for taxpayers expecting refunds to “get that return in as quickly as possible. Even if the staffing cuts don't impact the process, there's the potential for a government shutdown next month. That will compound problems.”

Agency's future under review

While IRS job cuts in the midst of tax filing season are certainly making headlines, perhaps of even greater interest to the electorate are recent statements from the administration suggesting that its larger goal may be to abolish the agency altogether, looking to tariffs, rather than income taxes, to fund the government, as Fox Business reports.

Commerce Secretary Howard Lutnick confirmed the president's interest in exploring such a concept, elaborating on the idea during an appearance with Fox News' Jesse Watters on Wednesday.

“We've got the power. We've got to use tariffs. We've got to use the External Revenue Service to take care of America and cut the scams and the abuse, the waste. And let's make America great. We mean 'great' by saying no deficit and, basically, try to eliminate the internal Revenue Service and our taxes,” Lutnick said, giving voice to a sentiment likely shared by millions.