IRS lost 40% of IT staff, 80% of tech leaders in 'efficiency' shakeup

Source: Hacker News

Overview

The IRS’s technology arm has experienced a rapid and extensive reduction in staff. According to the agency’s chief information officer, Kaschit Pandya, about 40 % of IT personnel and roughly 80 % of tech leaders left the organization during the latest restructuring effort.

Staffing Changes

• At the beginning of 2025 the IRS tech team comprised approximately 8,500 employees.
• A report from the U.S. Treasury Inspector General for Tax Administration (TIGTA) shows the IT workforce fell from 8,504 in October 2024 to 7,135 in October 2025.
• The agency lost about 40 % of its IT staff and nearly 80 % of its executives in the previous year, as noted by Pandya during a panel hosted by the Association of Government Accountants.

Reassignment of Personnel

• Roughly 1,000 technologists were detailed to support frontline services during the tax‑season filing period.
• Some of those employees have expressed concerns about the effectiveness and implementation of this reassignment.

Reorganization Details

Pandya described the restructuring as the most significant in two decades. Key elements include:

• Breaking down silos: Previously, teams operated largely within isolated departments.
• Cross‑functional teams: New groups are organized around end‑to‑end delivery of specific projects, aiming to eliminate “cold hand‑offs” between individuals.
• Scorecard focus: The ultimate goal is to align the entire IT organization around a unified performance scorecard.

Impact and Future Plans

• Artificial intelligence (AI): The IRS plans to integrate AI tools to enhance productivity and improve user‑focused services. Leadership has emphasized that AI adoption is not intended to threaten existing jobs.
• Digitization lag: TIGTA reported that the agency is behind schedule in digitizing paper returns. The IT function’s loss of roughly 16 % of its staff responsible for tax‑law updates puts the 2026 filing season at risk.

References

• Federal News Network – IRS CIO says agency lost 40 % of tech workers last year
• TIGTA – Readiness Memo (PDF)
• The Register – Feeling taxed by layoffs, IRS turns to AI helpers
• The Register – IRS has lost one‑quarter of its IT staff since Trump took office
• The Register – Dems hyperventilate about Palantir’s work with the IRS in letter to CEO Karp
• The Register – Dems are upset about DOGE’s IRS hackathon, but the IRS says it never happened