Internal Revenue Service employees are being offered a last opportunity to accept a voluntary buyout offer as the Supreme Court blocked a ruling requiring the Treasury Department and other federal agencies to rehire thousands of fired probationary employees. The acting commissioner of the IRS is reportedly among those who plan to accept the buyout offer after she was bypassed on an agreement to share confidential taxpayer data with the Department of Homeland Security's Immigration and Customs Enforcement unit.
The IRS sent a memo to employees announcing a reduction in force and offering employees three voluntary separation programs, according to a copy of the memo that was posted Tuesday to Reddit. Under the Treasury Deferred Resignation Program, the Treasury is offering a second and final deferred resignation program with applications accepted Monday, April 7, 2025, through Monday, April 14, 2025. The TDRP 2.0 program will mirror the benefits of the original deferred resignation program including paid administrative leave through Sept. 30, 2025. Employees who elect this program will have to offboard no later than Sept. 30, 2025, unless they choose to offboard sooner.
The IRS is also offering a voluntary separation incentive payment program to eligible employees, but they will have to depart no later than May 31, 2025, and administrative leave will not be offered to VSIP participants. Employees can elect to resign, optionally retire or take a combination of VSIP plus another program — voluntary early retirement application, or VERA. Employees who enroll in either the DRP or VSIP can also elect VERA, but they need to be at least 50 years old and have at least 20 years of creditable federal service, or be of any age with at least 25 years of creditable federal service, to be eligible.
Last week, after two court rulings in California and Maryland, the IRS's acting commissioner, Melanie Krause, announced the service would be bringing back approximately 7,000 probationary employees who had been fired and then put on paid administrative leave. However, last Friday, the IRS eliminated its Office of Civil Rights and Compliance, laying off approximately 130 employees, while also making plans to eliminate around 20,000 employees, or almost a quarter of its workforce.
"As we announced on Friday, the IRS has begun implementing a reduction in force that will result in staffing cuts across multiple offices and job categories," said the IRS memo.
Separately on Tuesday, the Supreme Court issued an order pausing the ruling from the California court ordering the Trump administration to rehire over 16,000 probationary employees who had been fired at the Treasury Department, as well as the Agriculture, Defense, Energy, Interior and Veterans Affairs Departments, according to The New York Times. The Supreme Court indicated that the nine nonprofit groups that had filed suit did not have sufficient standing. However, the court ruling in Maryland remains in effect.
The Times and Fox News also reported that the IRS and the Department of Homeland Security have reached an agreement to share IRS information on immigrants with the DHS's Immigration and Customs Enforcement unit. Under the memorandum of understanding, ICE officials will be able to ask the IRS for information such as confirming the addresses of people who have been ordered to leave the U.S. ICE would first need to provide the targeted immigrant's name and address, according to the Washington Post, along with the specific reason why the disclosure may be relevant to a non-tax-related criminal investigation. IRS officials had previously objected to sharing more extensive information such as Individual Taxpayer Identification Numbers, and the disagreement reportedly led to the departure of the IRS's former acting chief counsel. The acting commissioner of the IRS, Melanie Krause, reportedly plans to resign and participate in the deferred resignation program after she was bypassed on the agreement to share the confidential private information, according to the Washington Post. The previous acting IRS commissioner, Douglas O'Donnell, had opted to retire rather than participate in sharing confidential taxpayer information with immigration enforcement and the Elon Musk-led DOGE team.
