The Trump administration has plans to cut IRS staff in half as part of its “reduction in force” across government agencies. The IRS had already struggled for years to hire and retain enough staff, and the Trump administration’s plans for deep cuts come in the midst of the busy tax season.
The effect of the steep cuts will likely result in Americans waiting longer to receive tax refunds, dealing with slower processing times, and longer hold times when calling the IRS. But perhaps the largest impact could be on the agency’s ability to collect taxes from corporations and the wealthy, who often have complex ways to hide their taxable income.
Experts have expressed concern about the Trump administration’s plan for the IRS.
“This strikes me as foolhardy, unless your intention is to bankrupt the US government by essentially making tax-paying optional,” said Prof. 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 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, predicting that audits of rich individuals will happen less often, take longer, and be less in-depth.
The consequences of the job cuts may be felt for years, according to Janet Holtzblatt, senior fellow at the Urban-Brookings Tax Policy Center.
There was already trouble on the horizon because IRS funding through the Inflation Reduction Act is supposed to expire by the end of this year, and layoffs will only expand 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 is already having a huge impact on 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.”
Some Trump administration supporters have stated that the staff cuts can be made up by updating technology at the IRS to expedite processing and make the agency more efficient.
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.”