The U.S. Supreme Court has cleared the way for President Donald Trump’s sweeping plan to reduce the federal workforce, lifting a block on mass layoffs across 19 federal agencies, including the IRS. Reuters reports that, while not a final ruling, the decision allows the administration to proceed with downsizing efforts while legal challenges continue. 

According to Accounting Today, the executive order, issued in February, calls for aggressive cuts at key agencies like the IRS, the Department of Veterans Affairs, and the Department of Health and Human Services. The Department of Government Efficiency (DOGE) has taken point on implementing the layoffs. The IRS, already grappling with staffing shortages and a growing backlog of complex cases, could be hit hard by the reductions. 

Federal workers’ unions and advocacy groups have led to block the order, arguing that large-scale reorganizations require congressional oversight. A lower court had agreed, temporarily pausing the cuts. However, the Supreme Court disagreed, stating the administration is “likely to succeed” in its argument that the move falls within presidential authority. 

The IRS is already contending with major operational hurdles, including a 26 percent workforce reduction this year, and an influx of responsibilities tied to tax law changes, identity theft cases, and modernization demands. Further staff cuts could exacerbate delays in refund processing, customer service, and enforcement.