The Internal Revenue Service has increased the amount of overtime hours and pay for its employees after extensive staffing reductions and last fall's government shutdown, according to a new report.
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The report, released Monday by the Treasury Inspector General for Tax Administration, found the number of overtime hours worked by IRS employees increased 12% in the period from January through September 2025, compared to the same period in 2024, while salary expenses associated with this overtime increased by approximately $27 million. The IRS spent $198 million during the period of January through September 2024, compared to $225 million during the same period in 2025.
Last year, the IRS workforce declined approximately 25%, according to TIGTA (although other sources such as the National Taxpayer Advocate have put the percentage at 27%). TIGTA also reported in January that inventory levels in some of the IRS's main tax return processing programs increased by approximately 33% from December 2024 through December 2025 due to staff reductions and the government shutdown. Due to those higher volumes of tax return inventory to process, the IRS has required employees in certain divisions to work weekend overtime. According to IRS timekeeping records, regular work hours decreased by approximately 14% from 2024 to 2025 as employees were terminated, retired or took the various deferred resignation programs offered by the IRS and were placed on administrative leave.
(Read more: Taxpayer Advocate foresees tax season challenges at IRS)
Taxpayer Services accounted for 87% of the overtime hours worked, according to the report. IRS employees in the contact representative and tax examiner positions worked most of the overtime hours. The Taxpayer Services group is responsible for processing tax returns and taxpayer correspondence, answering taxpayer telephone calls, and adjusting accounts.
TIGTA found instances of potentially questionable use of overtime, with some employees reported working 20 or more hours in a single day, for example. Approximately 300 employees worked over 12 hours in a day, 74% of which were bargaining unit employees and may have violated an agreement between the IRS and the National Treasury Employees Union.
TIGTA made no recommendations in the report, and there was no response from the IRS included in the report.
