The Internal Revenue Service didn’t follow its own internal procedures when terminating thousands of probationary employees nor consider their individual performance, according to a new report.
The report, released Tuesday by the Treasury Inspector General for Tax Administration, took a critical look at the wave of terminations initiated earlier this year by the Elon Musk-led Department of Government Efficiency. Many of the terminations were halted by court challenges, but the IRS has nevertheless lost about 25% of the approximately 100,000 employees it had in January, due to layoffs, voluntary buyouts under the IRS’s deferred resignation programs, and early retirement.
The report noted that as part of President Trump’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, in February, the Treasury Department told the IRS to start sending termination notices to probationary employees. The letters notified employees they were terminated for performance reasons and current mission needs, but that typically wasn’t true.
As these activities were taking place, several senior IRS officials raised concerns to TIGTA that the probationary employees did not have documented performance issues. TIGTA also received letters from several members of Congress asking it to review the dismissal of probationary employees to determine if the dismissals complied with agency policies and whether individual performance was considered.
The report noted there have been ensuing court challenges since notices were sent to probationary employees in February terminating their employment. Subsequently, IRS and Treasury Department leadership decided that all of the 7,315 probationary employees who were sent termination notices must return to full work status by May. These employees were notified of their mandatory return date along with onboarding instructions. They had previously been placed on administrative leave after court rulings in March. TIGTA’s evaluation focused on the actions and processes that the IRS followed when it sent termination notices in February and March 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 to be 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 the probationary employees received the same letter that cited performance as a reason for their termination. TIGTA confirmed that nearly all the terminated probationary employees either did not actually have a performance rating on record or were rated as Fully Successful or better. The report found that 51% had no performance rating of record. For the remaining 49%, TIGTA determined that 3,251 (90%) actually had a “Fully Successful” rating, and 305 (8 percent) had an “Outstanding” or “Exceeded Fully Successful” rating. As a result, TIGTA concluded the IRS did not consider individual employee performance when terminating probationary employees.
“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,” said the report. “Despite these concerns, the IRS 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, 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 notices. At the time TIGTA published this report, it’s unclear whether any of the probationary employees will remain reinstated or if they will be terminated in a future large-scale RIF.
According to a report released last month by TIGTA about workforce reductions at the IRS through May of this year, 25,386 employees have separated, taken a voluntary buyout offer under one of the deferred resignation programs, or used some other incentive to leave. Another 294 employees were sent termination notices due to reduction in force actions. The departures represent 25% of the IRS’s workforce. The separations hit particularly hard at employees in enforcement positions, with approximately 27% of tax examiners now separated, and 26% of revenue agents separated.
