IRS Terminated Employees Without Following Internal Procedures

Cross References

TIGTA Report No. 2025-IE-R028, August 14, 2025 As part of the President’s actions to reduce the size of the federal government’s workforce, the Office of Personnel Management issued guidance for agencies to terminate probationary employees. As a result of these efforts, in February 2025, the Department of Treasury directed the IRS to begin sending termination notices to probationary employees. The letters notified employees that they were terminated for performance reasons and current mission needs.

As these activities were taking place, several senior IRS officials raised concerns to the Treasury Inspector General for Tax Administration (TIGTA) that probationary employees did not have documented performance issues. TIGTA also received letters from several members of Congress requesting a review on the dismissal of probationary employees to determine if the dismissals complied with IRS policies and whether individual performance was considered. TIGTA recently issued a report assessing the actions the IRS has taken to terminate its probationary employees.

There have been ensuing court challenges since notices were sent to probationary employees in February 2025 terminating their employment. Subsequently, IRS and Treasury Department leadership decided that all 7,315 probationary employees sent termination notices must return to full work status by May 2025. These employees were notified of their mandatory return date along with onboarding instructions. These employees had previously been placed on administrative leave after court rulings in March 2025. TIGTA’s evaluation focused on the actions and processes that the IRS followed when it sent termination notices in February and March 2025 to probationary employees. The IRS identified more than 16,000 employees who were still in their probationary period. After exempting employees who were either deemed essential personnel for tax filing season, had appeal rights, were involved in law enforcement, or were military spouses, the IRS issued termination letters to 7,315 probationary employees. The time between identifying employees and issuing termination notices was 29 days. All probationary employees received the same letter that cited performance as a reason for termination. TIGTA confirmed that nearly all the terminated probationary employees either did not have a performance rating on record or were rated as “Fully Successful” or better. TIGTA determined that 51 percent had no performance rating of record. For the remaining 49 percent, 3,251 (90 percent) had a “Fully Successful” rating, and 305 (8 percent) had an “Outstanding” or “Exceeded Fully Successful” rating. As a result, TIGTA concluded that the IRS did not consider individual employee performance when terminating probationary employees.

IRS Terminated Employees Without Following Internal Procedures continued

Performance Rating Number of probationary employees Below Fully Successful 43 Fully Successful and Above 3,556 No Performance Rating 3,716

Prior to the termination notices being sent, senior IRS officials refused to sign the notices and raised concerns that many of these employees did not have documented performance issues. Despite these concerns, the IRS’s Human Capital Office sent the notices. However, the IRS did not correctly identify all mission critical services and employees when it identified probationary employees who were exempt from termination. After sending out termination notices, the IRS later attempted to rehire a small number of employees who had incorrectly been identified for termination. In July 2025, the U.S. Supreme Court stayed the federal court’s prohibition on covered agencies implementing Agency Reduction in Force and Reorganization Plans and issuing or executing reduction in force (RIF) notices. At the time TIGTA published its report, it is unclear whether any probationary employees will remain reinstated or be terminated in a future large-scale RIF.