The American tax collection service saw a 25% decrease in staff last year, leading to a drop in audits. This has prompted some taxpayers to take advantage of certain tax breaks.
Over 200,000 employees were pushed out, resulting in around 200 billion dollars in savings, compared to the 1,000 species that have been saved. While the U.S. Government Accountability Office (Doge) faced a disastrous outcome, the department continues to disrupt the functioning of the U.S. administration.
The Internal Revenue Service (IRS) has been particularly affected by staff cuts imposed by the department once led by Elon Musk. As the tax filing season is in full swing in the U.S., the IRS is feeling the impact of this purge.
According to the Wall Street Journal, thousands of tax agents have been fired or encouraged to resign since Donald Trump’s return to the White House. Some have been reassigned to immigration enforcement services. As a result, the IRS workforce has dropped from 103,000 to 77,000 in 2025, a 25% decrease, according to the agency’s report. The next U.S. budget plans to have a total of 69,000 IRS agents by 2027, the lowest level since 2018.
Fewer Audits
With the Trump administration prioritizing the fight against social security fraud, the budget for tax audits has also been reduced. Adjusted for inflation, expenses for tax audits have fallen back to levels seen two decades ago, according to the Center on Budget and Policy Priorities.
As a result of drastic cuts in both IRS staff and budget, audits for taxpayers earning at least $10 million annually decreased by 9% in 2025 and are expected to drop by 39% this year.
Although some lawyers remind that audits have not disappeared and may occur within three years after tax filings, the IRS acknowledges fewer audits but insists they are now more thorough. Despite investing in AI tools to track down fraudsters, the IRS struggles to make up for the lack of manpower.
According to Charles Rettig, the tax deficit stands at nearly $1 trillion, with Americans paying less than what they owe, contributing to the country’s soaring public deficit and $39 trillion debt.
The IRS claims that audits and prosecutions of fraudsters bring in more revenue than they cost the federal government. However, the reduction in tax audit expenses results in missed opportunities and revenue for the U.S. According to Yale’s Budget Lab, while cutting IRS staff could save $46 billion in federal spending over the next decade, the U.S. could miss out on $643 billion in tax revenue during the same period.
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