12 Mar 2025
How Will the IRS Function after DOGE Dismissals?
Executive Order 14210 issued by the Trump Administration calls for a "critical transformation of the Federal bureaucracy," which provides, among other things, submission of a plan by the Director of the Office of Management and Budget (OMB) to reduce the size of the federal government's workforce. An earlier executive order placing a hiring freeze for federal civilian employees requires that each agency hire no more than one employee for every four employees that depart. See The White House, Regulatory Freeze Pending Review. However, the order specifically states that such provision does not affect the standing hiring freeze under the earlier executive order as applied to the IRS, which states that the hiring freeze remain in effect for the IRS until the Secretary of the Treasury, in consultation with the Director of OMB and the Administrator of the United States Department of Government Efficiency (DOGE) Service (USDS), determines that it is in the national interest to lift the freeze.
Related Content
- IRS Worker Layoff Could Hamper Enforcement, Groups Warn
See how the aims of the Inflation Reduction Act (IRA) have been impacted by IRS personnel cuts by DOGE, likely hobbling the IRS from the modernization and program aims of the IRA. The Trump administration has already cut more than 6,000 jobs at the IRS as part of its sweeping efforts to shrink the size of the federal workforce. This comes in the middle of tax season as millions of Americans file their income tax returns.
- Presidential Executive Actions Tracker
Reference news reports which indicate that the Elon Musk led DOGE could potentially access and review sensitive IRS taxpayer data, including millions of presently controlled files that include taxpayer information, bank records, and other sensitive records. In a February 25 hearing, Oversight Democrats voiced concern about invasion of the privacy of Americans’ personal and financial information. Rep. Tom Suozzi of New York warned that anyone who violates the Internal Revenue Code (see IRS, Disclosure Laws) by taking private data and sharing it with others “should be prosecuted to the full extent of the law.”
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- Tax Key Legal Developments Tracker (Federal) (Current)—keep up to date with key legal developments!
- Business Entities. IRS provides various prescribed rates for federal income tax purposes for March 2025 (the current month). Rul. 2025-6.
- Business Entities. IRS provides transitional relief from penalties for certain brokers who fail to report sales of digital assets, as defined in Reg. § 1.6045-1(a)(19), other than digital assets not required to be reported as digital assets pursuant to Treas. Reg. § 1.6045-1(c)(8)(ii), (iii), or (iv), on information returns (Form 1099-DA, Digital Asset Proceeds From Broker Transactions) or fail to furnish payee statements under I.R.C. § 6045. I.R.S. Notice 2025-3.
- Business Entities. IRS provides guidance regarding the federal income and employment tax treatment of contributions and benefits paid in certain situations under a state’s paid family and medical leave statute, and the related reporting requirements. Rev. Rul. 2025-4.
- International Taxation. Executive Order by President Trump provides that the OECD Global Tax Deal no longer applies in the United States, with a stated goal of safeguarding sovereignty and competitiveness while combating extraterritorial, discriminatory taxes impacting U.S. businesses. The Organization for Economic Co-operation and Development (OECD) Global Tax Deal (Global Tax Deal).
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