Treasury ends collective bargaining at IRS and Fiscal Service, vows unilateral changes

The Treasury Department on Feb. 27 terminated the collective bargaining agreement covering unionized workers at the Internal Revenue Service and this week moved to rescind the contract covering the Bureau of the Fiscal Service, a step officials say will let agencies implement personnel changes without negotiating with unions and could prompt new legal fights (AP; Federal News Network; KCRA; Boston25).

Treasury cited authority from an executive order President Donald Trump signed in March 2025 and a follow-up order last August as the basis for the action, and Office of Personnel Management guidance earlier this month directed agencies to notify unions that applicable CBAs were being ended (AP; Federal News Network; Boston25). OPM Director Scott Kupor, in a memo reported by multiple outlets, told agency heads to notify labor groups "that they are terminating any applicable CBAs (collective bargaining agreements), whether represented by the National Treasury Employees Union (NTEU) or another labor union" (AP; Boston25; LiveMint; Federal News Network).

IRS Chief Human Capital Officer Alex Kweskin informed staff that the agency had "now terminated its collective bargaining agreement" with the National Treasury Employees Union and that the IRS had unilaterally ended its 2022 national agreement and a 2025 addendum, cancelled negotiations in progress and would "implement any changes to conditions of employment without bargaining" (Federal News Network; AP). Kweskin framed the move internally as one that "deepens our commitment of operating as one IRS, a collaborative team focused on serving American taxpayers" and stressed continued adherence to civil service laws and equal employment protections (AP; Federal News Network).

Federal News Network reported that the Treasury rescinded the Fiscal Service's CBA and that bureau officials told employees this week the contract was being terminated and that a petition to decertify the union would be filed with the Federal Labor Relations Authority, which the outlet noted currently has a majority of Trump appointees (Federal News Network). Other outlets attributed the Fiscal Service action to two people familiar with the decision who spoke on condition of anonymity because they were not authorized to comment publicly (AP; KCRA; Boston25; LiveMint).

The moves follow a year of litigation and contested guidance. The NTEU sued last year over the March 2025 executive order, and a D.C. court issued a preliminary injunction that was later stayed pending appeal, according to reporting; a three-judge panel of the U.S. Court of Appeals for the Ninth Circuit issued a decision in a separate case this week that reporting said cleared the way for implementation (AP; Boston25; LiveMint). OPM's February memo to agency heads preceded the agencies' notices to staff (AP; Boston25; LiveMint; Federal News Network).

Policy and institutional consequences are immediate. Terminating CBAs and pursuing decertification would strip formal bargaining rights from thousands of federal employees at agencies that process tax collections and federal payments, potentially altering pay, schedules, grievance procedures and workplace protections. The Treasury and affected agencies have signaled they intend to proceed administratively; unions are likely to challenge the moves through the courts and administrative channels, continuing litigation over executive authority and labor rights (AP; Boston25; LiveMint).

The action also raises practical questions for implementation: Federal News Network reported the IRS is working with Treasury on a "systematic update" of personnel records to revoke bargaining-unit status, but agencies have not published detailed procedures or timelines for employee notices, appeals or changes to conditions of employment (Federal News Network). The coming days are likely to see new filings at the Federal Labor Relations Authority and in federal court as unions and agencies test the scope of the executive orders and the limits of administrative power (AP; Federal News Network).