The IRS broke its own rules when it fired thousands of employees earlier this year on the orders of the Trump administration, the Treasury Department’s internal watchdog agency found last week.
The terminated employees were not given proper notice, nor was their performance taken into account when getting rid of them, the office of the Treasury Inspector General for Tax Administration (TIGTA) concluded in a report released on Thursday.
“Internal procedures were not followed when sending the termination notices. Policies and procedures require the IRS to give probationary employees a 30-day notice and consider their performance prior to terminating them,” TIGTA found.
In February, the IRS fired 6,700 employees designated as probationary, meaning they were working for the agency on a trial basis prior to becoming full staff members.
The hires were part of a large-scale overhaul of the agency initiated by Democrats in 2022 as part of their Inflation Reduction Act. That legislation awarded the agency an initial $80 billion funding boost to be spent over the subsequent decade.
More than half of the initial money — $45 billion — was earmarked for extra tax enforcement, specifically increased audits for wealthy Americans. The IRS even set up a new division to go after complex partnerships, or nested legal entities that can shelter funds that are owed to the government.
Auditing sophisticated companies requires skilled staff, and the IRS had just started hiring a first tranche of personnel to make that happen, many of whom were in their trial period at the agency when they got canned by the Trump administration.
When they got fired, they were told it was for performance reasons, but TIGTA found on Thursday that the agency didn’t take performance into account when issuing pink slips.
“Termination letters cited performance as a reason for termination; however, the IRS did not consider individual performance when deciding which employees to terminate,” TIGTA concluded.
The Trump administration has declared an all-out bureaucratic war on public sector unions, firing employees at many different government agencies through a special cost-cutting panel. Last week, courts gave the go-ahead to the administration’s plan to do away with collective bargaining rights at a number of agencies.
It’s not clear whether TIGTA’s report presents a legal vulnerability for the Trump administration, but public sector unions are showing the resolve to fight for their jobs.
“Our friends with the VA have had their union contract terminated. They’ve had their rights to collective bargaining stripped. This is, we think, an illegal action,” Daniel Scharpenburg, vice president of the National Treasury Employee Union Chapter 66, said in a social media video posted last week, encouraging fellow union members to rally.
Republicans worked throughout the back half of the Biden administration to kill the IRS funding boost, clawing back an initial $20 billion before eventually freezing the rest of the audit funding through what was likely a stealth negotiating maneuver.
Biden administration officials told The Hill last year they had known about that loophole in the appropriations process and worked to prevent rescissions with requests to Congress. House Ways and Means Committee ranking member Richard Neal (D-Mass.) told The Hill last year that the freeze was likely due to a mistake.