The Tax Times: TIGTA Concluded That The IRS Wrongly Terminated Probationary Employees But They Still May Be Terminated

Tuesday, August 19, 2025

TIGTA Concluded That The IRS Wrongly Terminated Probationary Employees But They Still May Be Terminated

On July 1, 2025 we posted Supreme Court Limits Nationwide Injunctions: What You Need to Know & Impact on IRS Firings where we discussed that the Supreme Court Limited Nationwide Injunctions and thereby eliminated the District Court injunction of fired IRS employees, with the injunction only appling to those individuals who are parties to the case and the remaining 7000 workers can be fired.

Now TIGTA has released their Report Number: 2025-IE-R028 stating that there have been ensuing court challenges since notices were sent to probationary employees in February 2025 terminating their employment. Subsequently, IRS and Treasury Department leadership decided that all 7,315 probationary employees sent termination notices must return to full work status by May 2025. These employees were notified of their mandatory return date along with onboarding instructions. These employees had previously been placed on administrative leave after court rulings in March 2025. Our evaluation focused on the actions and processes that the IRS followed when it sent termination notices in February and March 2025 to probationary employees.

The IRS identified more than 16,000 employees who were still in their probationary period. After exempting employees who were either deemed essential personnel for tax filing season, had appeal rights, were involved in law enforcement, or were military spouses, the IRS issued termination letters to 7,315 probationary employees. The time between identifying employees and issuing termination notices was 29 days. All probationary employees received the same letter that cited performance as a reason 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. We determined that 51 percent had no performance rating of record. For the remaining 49 percent, we determined that 3,251 (90 percent) had a “Fully Successful” rating, and 305 (8 percent) 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.

Prior to the termination notices being sent, senior IRS officials refused to sign the notices and raised concerns that many of these employees did not have documented performance issues. Despite these concerns, the IRS Human Capital Office sent the notices. However, the IRS did not correctly identify all mission critical services and employees when it identified probationary employees who were exempt from termination. After sending out termination notices, the IRS later attempted to rehire a small number of employees who had incorrectly been identified for termination.

In July 2025, the U.S. Supreme Court stayed the federal court’s prohibition on covered agencies implementing Agency Reduction in Force and Reorganization Plans and issuing or executing reduction in force (RIF) 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.

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