The IRS is moving about 1,000 IT employees out of its tech shop, as part of a reorganization plan that’s been underway for months.

Impacted employees say they have few details about what work they’ll be doing, and have been told by the agency to instead “focus on completing an orderly transition of your current work.” The notice they received last week states that they will no longer be working on IRS IT projects.

According to the notice, obtained by Federal News Network, the reassignments will go into effect on Dec. 28.

“As part of the IRS’s restructuring of the IT organization, approximately 1,000 positions across IRS IT are being reassigned,” the Dec. 11 notice states. “Your position is among those identified for a directed reassignment to the Chief Operating Officer.”

Employees who received the email have until Jan. 9 to complete an “orderly transition.” That includes wrapping up current work, offloading assignments and supporting project handoffs.

“You are not expected to take IRS IT project work with you into the COO organization,” the email states. “IRS IT project work will remain within IRS IT.”

Impacted employees told Federal News Network they’re not sure what kind of work they’ll be doing as part of this reassignment. Federal News Network spoke to four IRS employees. The IRS and the Treasury Department did not respond to requests for comment.

“While this is a permanent realignment out of the CIO organization, it is not a permanent realignment into COO,” a separate internal document states. “We will be collaborating with the Human Capital Office (HCO) to align and qualify employees for positions across IRS and Treasury.”

Reassigned employees are being asked to upload their resumes no later than Jan. 23, 2026.

Two employees who received reassignment notices told Federal News Network that they also received reduction-in-force notices during the recent government shutdown.

Those RIF notices were rescinded, as part of the stopgap spending bill Congress passed in November, ending the 43-day shutdown. Language in the continuing resolution bars agencies from carrying out layoffs through Jan. 30, 2026.

“Morale at the IRS is at an all-time low, and nobody trusts anyone,” one IRS employee told Federal News Network. “This administration is getting precisely what it wanted — to destroy the IRS from within.”

The IRS told employees that the reassignments “are based on organizational alignment decisions and is not a reflection of individual performance.” The agency notice also states that reassignment will not affect an employee’s pay, benefits or bargaining unit status.

“Still complete chaos, grievances being filed for unfair moves without explanation and just fueled by who you know and connections,” a second IRS employee told Federal News Network.

Last month, IRS IT directed hundreds of its employees to complete a “technical skills assessment.” According to two IRS IT employees, the test, conducted by HackerRank, consisted of several multiple-choice questions and a coding question that made up the majority of the overall grade. One employee said the questions “had zero to do with our jobs.”

“They did this to say, ‘Look, 98% of our people failed, so we are going to move you or RIF you,’” the employee said.

The Treasury Department RIF sent RIF notices to 1,377 employees during the shutdown.  Court filings showed most of those notices went to IRS employees, especially those working in human resources and IT.

Sam Corcos, Treasury’s chief information officer and a Department of Government Efficiency representative, defended the IRS layoffs as “painful” in a recent podcast interview, but said they were a necessary tool to get the agency’s stalled IT modernization efforts back on track.

“It’s very hard to fire people. The only way that you can really reduce the size of government is through the reduction-in-force process,” Corcos said on an Oct. 9 episode of the Modern Wisdom podcast.

During the nearly three-hour interview, Corcos said much of his time as Treasury CIO has been focused on projects at the IRS, and that the agency’s IT workforce doesn’t have the necessary skills to deliver on its long-term modernization goals.

“We’re in the process of recomposing the engineering org in the IRS, which is we have too many people within the engineering function who are not engineers,” he said.

“The goal is, let’s find who our engineers are. Let’s move the people who are not into some other function, and then we’re going to bring in more engineers,” he added.

In March, the IRS removed 50 of its IT leaders from their jobs and put them on paid administrative leave. Corcos defended that decision, saying the IRS “has had poor technical leadership for roughly 40 years.”

During the interview, Corcos said the layoffs in the federal government are more restrictive than what’s allowed in the private sector. In practice, he said government RIFs often result in agencies losing younger employees with in-demand skills, but with less tenure — something he said should be corrected.

“When you do these reductions in force, it’s basically tenure. So it doesn’t matter who your top performers are. It’s effectively irrelevant to a RIF. If you want a 20% RIF, you can your 20% youngest people, who are often your top performers, and you’ve got to remove them,” Corcos said. “I think most people would probably say that performance-based RIFs is probably good instead of tenure-based. I’m sure that’s something people are pushing for, but that would make a really big impact.”

The IRS lost more than 25% of its workforce this year, largely through voluntary incentives, including early retirements and the deferred resignation program. Despite these widespread cuts, Corcos said the agency hasn’t seen “that much fallout yet,” because the agency had increased its staffing “to ahistoric levels” under the Biden administration.

“It’s a scalpel. It’s not a chainsaw,” he said.

The IRS, in a separate memo dated Dec. 15, told staff that it is moving ahead with a reorganization of its IT division, its first major restructuring in more than 20 years. IRS IT is replacing its associate chief information officers with four “mission-focused verticals” and five “foundational areas.”

Those four verticals are:

• Taxpayer Services & Online Accounts: Jim Keith
• Tax Processing: Miji Matthews
• Compliance: Eric Markow
• Filing Season & Legislative Deliver: Craig Drake

The five foundational areas are:

• Strategy & Product Management: Courtney Williams
• Data & Platform Engineering: Rob King
• Infrastructure Tech Ops: Lou Capece
• End User Digital Services: Tanya Chiaravalle
• Cybersecurity: Houman Rasouli

“Each area is designed to support a specific part of the tax administration ecosystem and improve how technology and agency needs come together,” the memo states.

According to the internal notice, IRS IT has about 5,100 full-time employees. The agency wrote that reorganization offers a “simplified structure that strengthens the connection between technical work and the agency’s core functions.”

IRS Chief Information Officer Kaschit Pandya told employees this summer that IRS IT needed to “reset and reassess” in part because more than 2,000 IT employees have left the agency this year.

The memo states that approximately 94% of IRS IT employees work in technical roles. The remaining 6% work in operational or support staff roles — including planning, financial, contractual, governance and program work.

The Treasury Department announced in April that it is planning to consolidate IT, human resources, procurement, travel and other administrative functions carried out by multiple offices at its component agencies.

The post IRS moves 1,000 IT employees out of its tech shop, with few signs of what work they’ll do next first appeared on Federal News Network.

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