The IRS lost about 40% of its IT workforce and nearly 80% of its technology leaders last year — deeper losses than have previously been reported.
IRS Chief Information Officer Kaschit Pandya said during an industry conference on Wednesday that the agency’s IT shop is going through its biggest reorganization in 20 years.
“Last year, we lost approximately 40% of the IT staff and nearly 80% of the execs. So clearly there was an opportunity, and I thought the opportunity that we needed to really execute was reorganizing,” Pandya said at annual event hosted by the Association of Government Accountants. “That’s why the silos existed, because everybody was operating in their own department or area.”
The IRS lost more than a quarter of its total workforce last year through voluntary separation incentives and retirements.
Pandya described a greater loss of IT employees than has previously been known. When asked about the IT reorganization, Pandya referred all questions to the agency’s press office.
Pandya told staff in an email last summer that the agency lost about 2,000 tech employees — roughly a quarter of its workforce.
In March 2025, the IRS removed 50 of its IT leaders from their jobs and put them on paid administrative leave. Treasury CIO Sam Corcos later defended that decision, saying in a podcast interview the IRS “had poor technical leadership for roughly 40 years.”
The IRS also recently moved more than 1,000 IT employees out of its tech division. Impacted employees were told to submit their resumes before the end of January, as the agency sought to place them into new jobs across the IRS and the Treasury Department.
Most employees haven’t been placed into permanent roles yet, but many have put on 120-day details to carry out frontline tax services during the tax filing season. The IRS missed several of its hiring goals for the filing season.
Employees on these 120-day details will carry out the work of customer service representatives and tax examiners, who review the accuracy of incoming tax returns. In some cases, they will assist in the processing of paper returns.
Training for these detailed employees is expected to start next week, nearly a month into the tax filing season.
Most of the employees on temporary details have little to no experience with the frontline taxpayer services work they’ve been assigned to.
One IRS IT employee received a notice to assist in frontline tax filing work, but told Federal News Network they haven’t yet heard what specific tasks they’ll be doing.
“I don’t know what role I will play. I haven’t heard of anyone with knowledge of how to do this,” the IRS IT employee said.
The IRS has also put human resources employees on 120-day details to assist with the filing season.
A second IRS employee told Federal News Network that in some cases, the agency has assigned GS-13 employees to carry out tasks that would normally be assigned to GS-8 or GS-9 employee.
“A colossal waste of time and money to the taxpayers,” the employee said. “Most of these folks have had zero experience with paper returns.”
Even with this reorganization underway, Pandya said the reorganization hasn’t immediately led to better outcomes for the agency.
“What it didn’t lead to is automatically everybody coming together and working as one team. We just had different silos,” he said.
To address this, Pandya said IRS IT has set up “cross-functional” teams that are each focused on the end-to-end delivery of a certain project or task.
“The infrastructure team works and sits in the development team. The cybersecurity team sits and works with the end user team. This way there isn’t a cold handoff of, ‘My job is X, and now I’m handing it off to somebody else,’” he said.
Pandya said the goal of these cross-functional teams is to have the entire IT organization working toward “one scoreboard.”
“Everyone should be able to see the value and the input and the outcomes of their work on the one scoreboard. Whatever that metric is, it measures the collective input of work being done across the teams,” he said. “People naturally tend to gravitate towards their area of comfort, and therefore you’re always going to have silos, which is why reorganization never fixes it.”
The Treasury Department recently released an updated inventory of use cases for artificial intelligence. Nearly half of them are projects deployed or in development at the IRS.
Pandya said the IRS has used AI to resolve some of the 450,000 IT help desk tickets that agency employees submit each year, but has taken an incremental approach to using AI tools.
“We want to rapidly expand on our use of AI, but we are also very aware of what the IRS is responsible for, safeguarding all taxpayer data. In fact, annually, we see roughly 12 billion unauthorized attempts against us. People are after our data, and we know so, and we are doing everything, and we’ll continue to do everything to ensure we safeguard those data,” he said.
Pandya said IRS leaders are trying to tell employees that AI will make them better at their jobs, but won’t take their jobs.
“The immediate fear is this is going to be applied to replace me, and if we don’t address it as you’re implementing, as you’re discussing it, as you’re planning for it, then you’re likely to face much more resistance in adoption of that technology. So I think it becomes absolutely critical and important that you engage with the end users who are going to be using those technologies and help them understand that this is to help improve what they can do, expand what they can do,” he said.
“It’s also an opportunity for them to expand their own skill sets that can be applied not only here, but perhaps in their future career stage — versus, ‘This is now going to take over what you used to do, and I am deploying this because I’m trying to find a reason to remove you.’”
Treasury Secretary Scott Bessent told lawmakers in May 2025 that an “AI boom” would help the IRS keep up with its workload despite its shrinking workforce.
If you would like to contact this reporter about recent changes in the federal government, please email jheckman@federalnewsnetwork.com, or reach out on Signal at jheckman.29
Copyright
© 2026 Federal News Network. All rights reserved. This website is not intended for users located within the European Economic Area.
