Cutting IRS staffing in half over the next 10 months would mean less help and longer waits for many U.S. taxpayers and increase the risk that wealthy tax cheats escape paying what they owe.
It also would leave the Internal Revenue Service with its smallest workforce since at least the 1960s, according to
The Trump administration plans to cut the number of IRS employees in half by the end of the year, Bloomberg Tax reported Tuesday. But gutting the workforce so dramatically and so quickly could mean slower refunds and processing of returns for many Americans, taking the agency back to the difficulties it experienced before an infusion of tens of billions in new funding under the 2022 tax-and-climate law known as the Inflation Reduction Act, according to tax professionals.
"This strikes me as foolhardy, unless your intention is to bankrupt the US government by essentially making tax-paying optional," said Kimberly Clausing, a tax law professor at the University of California at Los Angeles and a former Treasury Department official under President Joe Biden. "I think the approach they're following so far seems to be taking a wrecking ball to the system without concern for the consequences."
The planned job cuts in an IRS workforce that in January was roughly 100,000 would come across the agency. They would include attrition, layoffs, and two already-announced efforts: the firing of probationary employees, and Trump adviser Elon Musk's "deferred resignation" plan, under which some employees have resigned in exchange for getting paid through this September.
About 12,000 employees have already left the agency under those two efforts.
"The IRS needs more people, not less," said Lee Meyercord, a partner at Holland & Knight. Job cuts like these "will reverse the dramatic improvement in recent years in taxpayer service, collection, and enforcement."
Tax cheats "will sleep better at night," Clausing said, anticipating that audits of wealthy people would be more drawn-out, less efficient, and less probing when they happen at all.
Structure changes, uncertainty
Not everyone has the same view of the workforce changes.
Halving staff numbers "will force the IRS to rethink how it's structured and how it operates," said David Kautter, federal specialty tax leader at RSM US LLP and a former Treasury Department tax official during President Donald Trump's first term. The administration still wants to collect taxes, but the huge cuts are an expression of the idea that the IRS "needs to change" and "do something different," he said.
But large staffing cuts would mean longer waits for taxpayers to resolve disputes with the IRS, said Nikole Flax, a principal at PricewaterhouseCoopers and a former commissioner of the IRS's Large Business & International division.
There would be "less opportunities for tax certainty" if dispute-resolution programs like appeals, fast-track settlement and advance pricing agreements become less accessible to taxpayers, she said.
Longer waits on dispute resolution would also cost companies money, in the form of continuing legal fees and interest that keeps accruing on their tax bills.
'Distrust of the government'
Which areas will feel the greatest impact will depend on exactly where the job cuts ultimately are made, said Monte Jackel, principal at Jackel Tax Law and a former IRS official. Whether they're from employees generally or focused on IRS divisions such as LB&I and the Office of Chief Counsel; whether they're primarily in Washington or outside Washington.
"I don't know how they're going to prioritize it," Jackel said.
The consequences of the job cuts could be long-lasting, said Janet Holtzblatt, senior fellow at the Urban-Brookings Tax Policy Center.
Next year's filing season was already looking "shaky" anyway, she said, because IRS funding via the Inflation Reduction Act is supposed to dry up by the end of this year, and layoffs will only deepen the problems with IRS performance.
"In combination, it adds to the distrust of the government and it creates further vulnerabilities in the IRS's ability to administer the tax code," Holtzblatt said.
The threat of major job cuts has already decimated morale among IRS employees, said David Carrone, an IRS revenue agent and a chapter president for the National Treasury Employees Union in Arkansas and Louisiana.
"Your whole routine is gone. You're waiting for that tap on your shoulder," Carrone said. Employees continue to do their work, he said, but "the reality of the situation is everybody's head is spinning."
Kautter said the job cuts will spur the agency to adopt technology rapidly to carry out its work.
But improved IRS technology isn't a substitute for the people needed to conduct complex audits of wealthy people's complicated returns that are needed to force them to pay up, Carrone said.
"The computer can't catch those."
