The IRS has lost 40 percent of its IT staff and 80 percent of tech leaders in a sweeping reorganization under Elon Musk's Department of Government Efficiency. During a panel at the Association of Government Accountants, CIO Kaschit Pandya revealed this represents the agency's biggest tech restructuring in two decades.

The agency's tech team shrank from approximately 8,500 employees at the start of 2025 to 7,135 by October, with 40 percent of IT staff and nearly 80 percent of executives departing. The Trump administration's broader workforce cuts eliminated a quarter of IRS employees overall, but the technology division was hit disproportionately hard. Reports indicate 1,000 tech workers were reassigned to handle frontline services during tax season, a move that has drawn internal criticism.

Pandya acknowledged the reorganization hasn't yet delivered better outcomes, noting that employees still operate in silos despite structural changes. The agency is now establishing cross-functional teams focused on end-to-end project delivery. While AI is expected to play a significant role in improving efficiency, Pandya emphasized that leaders are telling employees AI won't threaten their jobs - though the agency has demonstrated it can eliminate positions through traditional means.