The Internal Revenue Service (IRS) will fire 15,000 employees next week, right in the middle of tax season, according to a report from AP. The mass termination is happening under Elon Musk’s Department of Government Efficiency (D.O.G.E.), a temporary agency created by executive order to cut federal jobs and slash government spending.

The layoffs come after the Trump administration ordered all federal agencies to terminate probationary employees who haven’t secured civil service protection. It’s unclear if more IRS workers will be affected, but sources say the cuts are happening fast.

IRS blocks tax season workers from taking buyouts

The administration had already launched a “deferred resignation program” designed to push federal employees out with buyout offers. The deadline to apply was February 6, and workers who accepted will keep getting paid until September 30—even after leaving their jobs.

But for IRS employees working on the 2025 tax season, the buyout was off-limits. The agency sent a letter telling them they must stay until the April 15 tax filing deadline before they could leave.

The IRS started processing tax returns on January 27 and expects to handle over 140 million filings before the cutoff. The agency had been on track to expand operations after receiving $80 billion through Biden’s Inflation Reduction Act. The funding was meant to hire thousands of new workers and upgrade enforcement technology.

But that plan fell apart. Republicans clawed back much of the money, and Elon’s D.O.G.E. is now eliminating positions instead of creating them.

14 states sue D.O.G.E. over government overreach

Elon’s D.O.G.E. isn’t just cutting jobs—it’s also taking control of federal data. Attorneys general from 14 states sued this week, accusing the agency of operating without oversight. The lawsuit, filed in Washington federal court, argues that D.O.G.E. is making decisions only a Senate-confirmed official should be allowed to make.

The complaint claims Elon’s team has “virtually unchecked power” and is violating constitutional rules about government agencies. The attorneys general argue that Trump’s executive order didn’t go through Congress, making D.O.G.E. legally questionable.

A federal judge ruled in Elon’s favor on Friday, denying an attempt to block D.O.G.E. from accessing government records. Unions and nonprofit groups had filed for a temporary restraining order, trying to stop D.O.G.E. from collecting data from three federal agencies. The Department of Labor, the Department of Health and Human Services, and the Consumer Financial Protection Bureau

Judge John Bates, appointed by George W. Bush, said the case was a “close question” but ultimately ruled that D.O.G.E. is an agency. That means it can send its employees to other government offices and access their records under the Economy Act.

“The plaintiffs have not shown a substantial likelihood that [D.O.G.E.] is not an agency,” Bates wrote. “If that is so, [D.O.G.E.] may detail its employees to other agencies consistent with the Economy Act.”

Federal judge questions D.O.G.E.’s legal structure

Elon’s D.O.G.E. was designed to operate outside normal government channels. Instead of answering to the Office of Management and Budget (OMB), it reports directly to Trump’s chief of staff.

Judge Bates called that structure “odd,” saying D.O.G.E. had been built to “avoid being an agency,” while still claiming agency privileges when it was convenient.

“They took great effort to avoid being an agency, but in this case, you’re an agency,” Bates said. “It just seems to strain credulity.”

The ruling gives Elon’s team full access to federal data, and the Justice Department is backing them. Government lawyers argued that D.O.G.E. employees are “detailed” government workers, meaning they have legal rights to see sensitive records.

Elon reposted the ruling on X, writing: “LFG.”

Concerns over Elon’s access to federal data

Union attorneys representing Labor Department workers say D.O.G.E. could now access confidential financial, medical, and employment records.

Lawyer Mark Samburg told the court that D.O.G.E. employees could pull data on taxpayer information, employee complaints, workplace safety violations, and medical histories.

Some records involve ongoing investigations into Elon’s own companies. Tesla and SpaceX are both under review for workplace issues, and there’s concern that D.O.G.E. could get access to those files.

Samburg warned that the ruling could have a “chilling effect” on government whistleblowers. Employees might hesitate to report problems or file complaints if they think D.O.G.E. could access their information.

“The sensitive information of millions of people is currently at imminent risk of unlawful disclosure,” Samburg said.

Unions and advocacy groups pushed for a temporary restraining order to prevent D.O.G.E. from pulling data until stricter oversight was put in place. Judge Bates denied the request.

For now, Elon’s agency moves forward. The IRS terminations will happen next week. The layoffs, the data access, and the lawsuits are all in motion.

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