Overview
- The IRS has already seen an 11% workforce reduction in 2025, including the loss of 31% of its auditors, according to a TIGTA report.
- Treasury Secretary Scott Bessent has proposed eliminating an additional 40,000 IRS jobs, potentially halving enforcement staff, as part of the FY2026 budget plan.
- The Treasury asserts that advancements in AI and IT modernization will maintain tax collection efficiency despite the staffing cuts.
- Independent analyses, including from the Yale Budget Lab, project potential revenue losses ranging from $159 billion to $1.6 trillion over the next decade due to weakened enforcement.
- Critics warn that reduced audit capacity could embolden tax evasion, especially among high-income individuals and corporations, undermining federal revenue collection.