The Internal Revenue Service (IRS) probationary employees, who were previously laid off by the US government and then reinstated, have been instructed to return to the office by 23 May, Bloomberg reported.

This follows a period of paid administrative leave starting in mid-March and a series of court rulings that have impacted their employment status.

The latest development comes after a federal judge in Lexington, Kentucky, ruled against the US Treasury Department’s attempt to cancel a union contract that affects several IRS staff on 21 May 2025.

The US District Judge Danny Reeves said that the department lacked the legal standing to bring the lawsuit against the National Treasury Employees Union.

More than 7,000 IRS probationary workers, who have fewer protections than permanent staff, were initially dismissed on 20 February, but were subsequently reinstated and placed on paid leave after two court decisions in their favour.

Their return was initially scheduled for 14 April but was delayed by the IRS.

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The employees due to resume work on 23 May had not accepted any of the two deferred resignation programme offers from the government and the Treasury Department.

On 9 May, a federal judge ordered the government to temporarily halt its widespread layoffs and dismissals of government workers.

Judge Susan Illston of the US District Court for the Northern District of California indicated that US President Donald Trump’s executive order from February, which called for a significant reorganisation of the federal workforce, likely contravenes the Constitution.

Although the layoff freeze was set to end on 23 May, Judge Illston expressed her inclination on 22 May to issue a preliminary injunction that would extend the layoff pause while the legal case continues, offering temporary protection to the jobs of the federal workers.

Earlier in May 2025, the Treasury Inspector General for Tax Administration (TIGTA) reported that the IRS has seen an approximately 11% reduction in workforce, with 11,443 employees affected by March 2025.