Recent IRS cuts could affect the agency’s operations
Image: Getty
Tax Day is right around the corner—and it could look a bit different this year on the federal government’s side, amid ongoing plans by the Trump administration to shrink the Internal Revenue Service.
What’s going on?
The IRS’ expansion, started under former President Biden in 2022, has been halted after President Trump took office this year and Republicans gained full control of Congress.
In recent months, the Trump admin has:
- Frozen all new IRS hiring.
- Granted buyouts to ~4% of the agency’s employees (~4,000 workers).
- Fired an additional ~7,000 probationary IRS workers—though they were later reinstated by a federal judge.
Additionally, Republicans in Congress have clawed back or frozen over half of the $79.4 billion allocated to the IRS in the 2022 Inflation Reduction Act.
The debate: Trump admin officials frame the recent IRS cuts as a push towards shrinking overall federal bureaucracy and promoting greater efficiency, via consolidating many of the IRS’ critical functions and relying more on technology for taxpayer service and enforcement.
- But critics of the cuts, including some Democrats and policy researchers, note that many of them target the IRS’ tax enforcement staff, arguing that retreating from greater enforcement will cost the US government tens of billions of dollars in annual revenue from tax dodgers (mostly wealthier taxpayers and corporations).
Zoom out: The IRS has seen a sharp decrease in audits over the past decade, per a recent NY Times analysis of federal data. The audit rate of individual taxpayers has decreased about two-thirds since 2010 (from 1% of returns to 0.36%), reaching its lowest level since at least 1950, while similar “steep declines” have been seen in corporate audits.
Looking ahead…Further IRS job cuts are expected in the coming weeks or months. Multiple news reports say as many as 20,000 staffers—up to 25% of the workforce—will have their roles eliminated by mid-May, though the Treasury Department hasn’t announced a specific target.
📊 Flash poll: In general, how do you feel about the US government’s recent moves to reduce IRS headcount and funding?
See a 360° view of what pundits are saying →
Sprinkles from the Left
- Some commentators argue that Trump’s cuts to the IRS work against his administration’s plan to balance the federal budget, since they could easily mean $2+ trillion in lost revenue over 10 years due to lesser enforcement against tax cheats.
- Others contend that beyond lowering revenues, the IRS cuts will lead to more widespread tax evasion with implications across the US economy, providing competitive advantages to those able and willing to avoid their tax obligations.
- “DOGE says it’s saving $100 billion. It’s about to lose a lot more.” –Natasha Sarin, WaPo
- “The IRS faces more cuts under Trump. Here are three ways that could hurt the economy” –Ben Harris, LA Times
- “IRS cuts make Uncle Sam lose money” –New York Daily News Editorial Board
Sprinkles from the Right
- Some commentators argue that Americans should be optimistic about the Trump administration reforming the federal tax system and making the IRS far more efficient than it has been in the past.
- Others contend that the IRS should change its deserved reputation for inefficiency and a misguided emphasis on enforcement rather than customer service, which creates a climate of frustration, fear, and fury for its core client, the taxpayer.
- “Tax reform, deficit reduction and a functional IRS all go hand in hand” –Chicago Tribune Editorial Board
- “The IRS must get smaller — and smarter” —Rob Green, Washington Examiner
- “The IRS’s next target should be its own tax-dodging workforce” –NY Post Editorial Board
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