According to a report by the U.S. Treasury Department regulator, the Trump administration's plan to prune the IRS workforce has caused almost one-third of its tax auditors to leave the agency.
Elon Musk's government efficiency ministry (or Dogee) attempts to trim the federal labor force through layoffs and so-called delayed resignation. Musk, CEO of billionaire Tesla, explain In the earnings call of the electric vehicle maker on April 22, Doge's efforts "address waste and fraud aspects" will "get the country back on track."
The IRS has been the focus of Doge's cost-cutting efforts and plans Trim up to 40% of the labor force This year. The May 2 report found that by March, those efforts caused tax agencies to lose 11% of their labor.
However, income agents – IRS workers who conduct audits – have suffered a bigger blow, with 31% of workers (about 3,600 auditors) accepting a plan to defer a resignation or being fired within the first three months of 2025. Losing a large portion of auditors could affect the federal government’s ability to collect taxes, experts say, because these agents usually handle cases involving wealthy taxpayers or companies.
“You lost trained staff to keep high-end taxpayers and corporate taxpayers compliant.”
She added: “When taxpayers (especially those who really don’t want to pay their bills) accept that you have little or no payment and even the risk of submitting an application is small, you’ll see some behavioral impact.”
A Treasury spokesman said: "The Biden administration has increased the IRS from 79,431 to 102,309. Under the new leadership, approximately the same number of employees left the IRS, and the vast majority voluntarily left the deferred resignation program in case of adverse resignation results and good functional effects. The secretary is committed to ensuring efficiency in providing the collection, privacy and customer service that the American people deserve."
The White House did not immediately return a request for comment on the Tigta report.
Although the TIGTA report does not explain why auditors leave the overall cuts in IRS, the tax agency has made efforts under Biden Administration to hire more auditors to strengthen revenue. In February 2024, the IRS said Hundreds of billions of dollars are expected to be collected More auditors were hired in additional taxes after using funding from the Inflation Reduction Act.
Because the focus of cutting is to fire the so-called "Probation workers"Or often in junior federal employees who are working for less than a year or two, there may be more newly hired auditors affected by the reduction," Devito said.
Auditing wealthy Americans and companies can be profitable to the federal government. Tigta reports that in fiscal year 2023, auditors recommended an additional $32 billion in tax assessment.
According to an analysis by Better IRS, an advocacy group that claims free tax filings, income earnings are about $26 for every $1 spent to audit the highest income.
Devito added that tax agencies are responsible for collecting most of the nation’s revenue, and cuts by the IRS audit force raise questions about the effectiveness of the Doge efforts.
According to the Treasury Department, the combination of personal income tax and corporate income tax can provide about 60 cents of federal income, with the remaining 40 cents coming from payroll taxes and expenses, such as paying admission to a national park.
According to an analysis of the nonpartisan research group's Public Service Partnership, Doge's cost-cutting efforts may end up being nearly as much as their savings as they save.
Doge claims to have saved $165 billion, but the public service partnership estimates that the goods have been saved Cost 135 billion US dollars The wrong fired workers were rehired and productivity lost due to paid leave. The group said the figure also ruled out the impact of multiple lawsuits filed against Doge's actions and the loss of taxes due to tax cuts by the IRS.
According to estimates from Yale University's Budget Laboratory, the IRS may give up $323 billion in tax revenue over the next decade.
"Doge's argument is to save money - if we don't have that large federal labor force, then we'll save money for the government," Devito said. However, with the potential loss of taxes, reducing the IRS "has no point."