Treasury Inspector General finds IRS didn't follow procedure in dismissing probationary employees

[Internal Revenue Service]
Douglas Rissing/iStock via Getty Images

The Treasury Inspector General for Tax Administration ("TIGTA") said the Internal Revenue Service terminated probationary employees, as part of President Donald Trump's orders to reduce the federal government workforce, without following procedures and considering individual performance, according to a recent report it issued.

Of the more than 16,00 employees who were still in their probationary period, the IRS and Treasury department identified 7,315 employees for termination, after exempting essential personal for tax filing season, those with appeal rights, those involved in law enforcement, or employees who are also military spouses.

The TIGTA said all the probationary employees slated for dismissal received the same letter that cited performance as a reason for termination. Before the termination notices were sent, senior IRS officials refused to sign the notices and raised concerns that many of the employees didn't have documented performance issues. However, the IRS’s Human Capital Office sent the notices in February and March.

In addition, the IRS didn't correctly identify all mission-critical services and employees when it identified probationary employees who were exempt from termination. After sending out the termination notices, the IRS later tried to rehire a small number of employees who had incorrectly been identified for termination.

"We 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," the TIGTA said.

Of the total that were terminated:

* 51% had no performance rating of record. Of the remaining 49%:
* 3,251, or 90%, had a "Fully Successful" rating;
* 305, or 8%, had an "Outstanding" or "Exceeded Fully Successful" rating.

"As a result, we conclude that the IRS did not consider individual employee performance when terminating probationary employees," the report said.

After court challenges were made in response to the February and March dismissals, IRS and Treasury Department leadership decided that all 7,315 probationary employees sent termination notices must return to full work status by May 2025. The affected employees were notified of their mandatory return date along with onboarding instructions. They had been put on administrative leave after the court rulings in March 2025.

In July 2025, the U.S. Supreme Court stayed the federal court's prohibition on covered agencies implementing agency reduction in force (RIF) and reorganization plans and issuing or executing reduction-in-force notices. "At the time we published this report, it is unclear whether any probationary employees will remain reinstated or be terminated in a future large-scale RIF," the TIGTA said. [https://www.tigta.gov/sites/default/files/reports/2025-08/2025ier028fr.pdf]

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