Job cuts at the IRS's tech arm have gone faster and farther than expected, with 40 percent of IT staff and four-fifths of tech leaders gone, the agency's CIO revealed yesterday.
Kaschit Pandya detailed the extent of the tech reorganization during a panel at the Association of Government Accountants yesterday, describing it as the biggest in two decades.
This happened as the Trump administration reshaped the federal bureaucracy last year with Elon Musk's DOGE wielding the chainsaw.
The IRS lost a quarter of its workforce overall in 2025. But the tech team was clearly affected more deeply. At the start of the year, the team encompassed around 8,500 employees.
As reported by Federal News Network (FNN), Pandya said: "Last year, we lost approximately 40 percent of the IT staff and nearly 80 percent of the execs."
"So clearly there was an opportunity, and I thought the opportunity that we needed to really execute was reorganizing."
That included breaking up silos within the organization, he said. "Everyone was operating in their own department or area."
It is not entirely clear where all those staff have gone. According to a report by the US Treasury Inspector General for Tax Administration, the IT department had 8,504 workers as of October 2024. As of October 2025, it had 7,135.
However, reports say that as part of the reorganization, 1,000 techies were detailed to work on delivering frontline services during the US tax season. According to FNN, those employees have questioned the wisdom of this move and its implementation.
At yesterday's conference, Pandya said better outcomes had yet to be delivered. "What it didn't lead to is automatically everybody coming together and working as one team. We just had different silos," he said. But his department had now set up "cross-functional" teams focused on end-to-end delivery of individual projects.
"This way there isn't a cold hand-off of, 'My job is X, and now I'm handing it off to somebody else,'" he said.
Ultimately, he said the aim was to have the IT group as a whole working toward a "scorecard."
Naturally, AI is expected to play a significant role in all this, making people better at their jobs and more end-user-focused, he said.
However, Pandya said IRS leaders are telling employees that AI won't endanger their jobs. Clearly the agency is perfectly capable of getting rid of people the old-fashioned way.
The US Treasury Inspector General for Tax Administration said last month the agency was behind in its efforts to digitize paper returns. It noted: "The Information Technology function lost approximately 16 percent of its staff," who are responsible for updates for inflation and expiring or newly enacted tax provisions. This meant that "according to the IRS readiness reports, implementation of these legislative changes is at risk for the 2026 Filing Season." ®