IRS to Cut 20% Staff, Boost Phone Support in 2026
TL/DR –
The Internal Revenue Service (IRS) budget is projected to drop by 37% from fiscal year 2025 to 2026, with the workforce expected to decrease by 20% over the same period, according to a Congressional Budget Justification. The total budget for 2026 is suggested to be $14.2 billion, down from $22.5 billion, largely due to a reduction in budgeting from the Inflation Reduction Act. While the numbers of technology support and operations employees will decrease by 59% and enforcement employees by 31%, taxpayer service employees will see a 48% increase.
IRS Budget and Staffing Reductions for 2026
The Congressional Budget Justification report indicates a decrease of 37% in the IRS budget and a 20% reduction in IRS staff from fiscal year 2025 to 2026. The report, released by Treasury on May 30, shows the IRS staff dropping from 96,700 in 2025 to 77,728 in 2026.
The proposed budget for 2026 is $14.2 billion, reduced from $22.5 billion in the 2025 operating plan. This decrease is largely due to budgeting $2.2 billion from the Inflation Reduction Act in 2026 compared to $9.3 billion in 2025.
The report forecasts nearly $59 billion of the IRS’s $80 billion budget from the Inflation Reduction Act to be rescinded. Staffing in technology and operations support is set to decline by 59%, decreasing from 10,371 to 4,250. Enforcement employees are expected to drop by 31%, from 32,350 to 22,303.
However, taxpayer services staff are projected to increase by 48%, from 23,001 to 34,044 due to a proposed addition of new full-time employees. Nonetheless, the service level is anticipated to be 85% during the 2026 filing season, slightly lower than 2025’s 87% figure. The report warns of significant service impairment and long wait times if the investment falls below the requested level.
It remains unclear if the 20% staff reduction includes IRS employees who left the agency in 2025. According to a May report by the Treasury Inspector General for Tax Administration, the IRS lost over 11,000 staff, or 11%, through voluntary separations and terminations in the first quarter of 2025.
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