IRS axes civil rights office as it slashes a quarter of its workforce in high-stakes overhaul

In a dramatic escalation of federal workforce reduction efforts, the Internal Revenue Service (IRS) has begun implementing a sweeping plan to cut up to 25% of its total staff—equivalent to approximately 25,000 jobs—starting with the controversial elimination of its Office of Civil Rights and Compliance. The move, which began on Friday, marks one of the most extensive staff reductions in the agency’s modern history and has already sparked a wave of concern among civil rights advocates, tax professionals, and former agency leaders.

According to internal communications obtained by ABC News and corroborated by other major outlets, the layoffs are part of a phased “reduction in force” strategy that the IRS says is aimed at increasing operational efficiency and aligning staffing with “agency priorities.” The civil rights office will be functionally shut down, with remaining employees reassigned to the Office of Chief Counsel, effectively dissolving one of the IRS’s core oversight divisions dedicated to equity and nondiscrimination.

While the IRS states that the workforce reduction is designed to streamline bureaucracy and improve service delivery, several experts have warned of serious downstream consequences, especially given the timing of the move—smack in the middle of tax season.

How does this workforce cut align with broader government restructuring under the Trump administration?

The latest IRS restructuring is part of a broader federal government overhaul being championed by the Trump administration, which returned to office this year with a mandate to dramatically downsize what it perceives as bloated federal agencies. These changes are being implemented under the guidance of the newly empowered Department of Government Efficiency (DOGE), spearheaded by tech magnate Elon Musk. The department has become a central player in reshaping everything from workforce models to inter-agency data sharing protocols.

Under DOGE’s directive, several agencies—including the IRS—have faced pressure to reduce headcount, consolidate overlapping functions, and modernize their data systems. The IRS, historically one of the most labor-intensive arms of the federal government due to its complex enforcement and processing duties, has now become a focal point in these efforts.

Earlier in 2025, the IRS had already mapped out plans to reduce its workforce by 18% to 20% before mid-May, a goal now accelerated to 25% amid internal restructuring. Over 4,000 employees had previously accepted voluntary resignation offers extended in the administration’s first quarter, and more than 6,600 probationary staff were dismissed—although some were later reinstated following court orders. These actions were a prelude to this latest, more aggressive wave of layoffs.

What are the implications of eliminating the IRS Office of Civil Rights and Compliance?

Perhaps the most politically and socially charged element of the IRS layoff plan is the elimination of its Office of Civil Rights and Compliance. Formerly known as the Office of Equity, Diversity, and Inclusion, this office has been responsible for ensuring nondiscriminatory practices in both the treatment of taxpayers and within the agency’s own workforce. Its dissolution has prompted backlash from civil rights groups and public administration experts, who argue that the decision sends a troubling signal about the agency’s commitment to fairness and transparency.

Sources familiar with the transition report that roughly 75% of the staff in the civil rights office will be let go, while the remaining personnel are to be reassigned to the legal division. This change effectively subsumes the office’s responsibilities into a broader legal framework, eliminating its standalone oversight capacity. Critics argue that such consolidation dilutes accountability and removes a necessary check on institutional bias, especially in an agency that directly interacts with tens of millions of Americans annually.

Could the IRS layoffs disrupt tax season processing or refund timelines?

The IRS insists that the layoffs will not directly impact employees responsible for processing tax returns or issuing refunds. However, former IRS commissioners and tax law experts have raised red flags about the risks of downsizing during such a critical operational window. The U.S. tax system handles more than 160 million individual filings per year, and any disruption in personnel—even in tangential departments—could cause ripple effects across processing times and audit backlogs.

One former IRS commissioner told ABC News that “it has always been a rule of thumb to avoid internal shakeups during filing season because the system is delicate.” He noted that removing nearly 10% of the workforce during this period is “extremely risky” and could compromise service reliability just as taxpayers are submitting returns and awaiting refunds.

Furthermore, approximately 50 IT security staff were recently placed on administrative leave, reportedly as part of this same restructuring. This move adds another layer of concern given the increased risk of cyberattacks and data breaches during peak tax filing periods. The IRS has become an increasingly prominent target for fraudsters and ransomware actors, and a reduction in cybersecurity personnel could leave critical infrastructure exposed.

What does this reveal about federal employment trends and public-sector morale?

The IRS workforce reduction offers a snapshot of a broader trend in federal employment: the strategic shrinking of government personnel in favor of automation, private-sector outsourcing, and centralized digital systems. While proponents of the DOGE-led transformation argue that the government needs to “do more with less,” critics counter that such aggressive downsizing risks undermining public trust and operational capacity.

In recent months, the IRS has seen the resignation or demotion of several top-level leaders, including its chief human resources officer, acting commissioner, and acting general counsel. These leadership departures, combined with the mass layoff strategy, have fueled speculation that the agency is facing internal resistance or morale issues stemming from the pace and scale of the changes.

At the same time, federal unions and civil service advocates are calling for more transparency into how employees are being selected for termination and whether the reassignments are truly based on performance metrics or political considerations.

How might this reshape the future of tax enforcement and federal oversight?

Looking ahead, the structural changes underway at the IRS could have significant long-term consequences for how tax enforcement and oversight are carried out. With fewer staff and diminished internal safeguards like the civil rights office, critics fear a scenario in which enforcement becomes more automated and less responsive to nuanced cases of taxpayer discrimination or hardship.

The Trump administration maintains that the reforms are a necessary evolution, positioning the IRS to become a leaner and more tech-savvy agency capable of leveraging AI and cloud-based tools. However, whether such digital transformation can replace the institutional knowledge and human oversight being lost remains a critical question.

While it is too early to determine the full impact of the layoffs, many are watching closely to see whether taxpayer satisfaction, return accuracy, or audit rates change in the coming quarters. In an election year and with rising scrutiny over federal efficiency and equity, the IRS’s restructuring could become a litmus test for the broader federal overhaul underway.

If this experiment in large-scale workforce reshaping fails to deliver on promised efficiencies—or worse, results in processing delays or compromised oversight—the administration may face not only logistical fallout but also political consequences that reverberate beyond tax season.