Elon Musk spent months pushing 22,000 IRS workers toward the exit.
Now a federal watchdog says hundreds walked out with more than a buyout check.
The IRS called it lost property – the Treasury Inspector General has a different word for it.
TIGTA Report Says 594 Missing IRS Laptops Should Be Declared Stolen
The DOGE-era buyouts that cleared more than 22,000 employees from IRS payrolls between April and July 2025 left one problem nobody solved: getting the equipment back.
Those departing employees had more than 32,000 government IT assets assigned to them.
By November 2025, more than 1,300 devices were unaccounted for.
The IRS ran an inventory.
Some equipment had been collected by supervisors who never forwarded it to the IT office. Other devices had been returned but never properly logged.
But as of April 2026 – a full year after the departures began – 594 devices were still gone.
Laptops and smartphones – more than $270,000 worth of taxpayer-funded hardware.
No one cleared the drives or wiped the phone memories before they walked out the door.
The IRS Computer Security Incident Response Center officially declared the missing equipment "lost."
The Treasury Inspector General for Tax Administration released a report Thursday finding the agency cannot show a single one of the missing devices was actually handed back.
Sensitive taxpayer data is sitting on 594 uncleared drives in unknown hands.
The inspector general said the correct word for that is "stolen."
IRS Had No Policy to Recover Devices From DOGE Buyout Employees
The IRS required departing employees to return their equipment but the agency set no deadline for return.
It built no system to bill employees who kept the devices.
Nobody went looking for the workers who still had them.
"There are no consequences if a departing employee fails to return their assets," the watchdog's report stated.
IRS Chief Information Officer Kaschit Pandya admitted in the agency's written response that forcing equipment back from former employees was "limited." He committed to new policies and return timelines, and said the IRS would ask the inspector general to assist where "appropriate."
The audit uncovered a second breach as well.
Some former employees who used personal devices for IRS work had their network access left active after they separated from the agency – a direct violation of security protocol.
That access has since been revoked.
None of the missing government devices or unsecured personal devices were used to attempt re-entry into IRS systems, the agency confirmed.
But 594 government-issued laptops and smartphones remain unaccounted for – no recovery timeline, no criminal referrals in sight.
The IRS holds tax records on hundreds of millions of Americans. Every uncleared device still out there is an open data breach.
IRS Taxpayer Data Security Has Failed Inspector General Reviews for Two Decades
Between 2003 and 2006, the IRS documented 387 separate incidents involving the loss or theft of at least 490 computers. Congress demanded answers and watchdogs demanded better tracking. The agency promised to do better.
Twenty years later, the Treasury Inspector General is writing the same report.
The DOGE buyouts accomplished something real – cutting a bloated agency that spent decades making itself untouchable. Trump's efficiency drive cleared more than a quarter of the IRS workforce in months, a purge Washington insiders swore was impossible.
But the bureaucracy extracted its toll on the way out the door.
Workers pocketed government hardware. The agency declared the devices lost instead of stolen. In its formal response to the audit, the IRS was still promising to "come up with new rules."
Trump's IRS leadership has a straightforward move available right now: formally reclassify all 594 missing devices as stolen, as the inspector general recommended. Then refer every case to federal law enforcement and recover the cost from every former employee who kept the hardware.
The IRS does not offer that same courtesy to ordinary Americans.
An American who misses a tax payment can have wages garnished and a lien filed on the home before the dispute is ever heard.
Audits routinely demand years of receipts on short notice and drag on for months while the taxpayer proves every dollar is legitimate.
An IRS employee who walked out the door with a government laptop – hardware bought with the same tax money – had the device declared lost property and nobody ever came to collect it.
That is the institution Washington built.
Former federal workers sitting on uncleared IRS laptops loaded with taxpayer data are not a paperwork problem.
They are 594 open criminal referrals.
The inspector general already told the IRS what to call this. The agency just needs to start treating its own employees the way it treats everyone else.
Sources:
- Stephen Dinan, "Workers in IRS buyout kept hundreds of government computers, smartphones," The Washington Times, August 27, 2026.
- Treasury Inspector General for Tax Administration, Report No. 2026-IE-R013, August 27, 2026.