The recent overhaul of IRS staff signifies a bold reshaping of its workforce, as 31% of the tax agency’s auditors are now gone.
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On May 5, 2025, an inspector general report revealed that more than 11,000 IRS employees left their positions, with layoffs hitting auditors the hardest.
Over 7,300 probationary employees departed due to series of cost-cutting measures under President Trump’s administration, aligning with Elon Musk’s Department of Government Efficiency (DOGE) strategy.
The effective reduction in IRS manpower highlights a deliberate and methodical strategy aimed at trimming government inefficiencies, despite concerns over tax enforcement capabilities.
The numbers are telling: the IRS lost 31% of its auditors, with over 3,600 revenue agents, 18% of revenue officers, and 10% of tax examiners leaving their posts.
These changes not only underscore a significant shift in the IRS’s workforce strategy but also raise eyebrows regarding future tax compliance and potential revenue impacts.
The exodus didn’t stop there. Beyond the layoffs, over 4,100 employees accepted resignation offers, and an additional 13,100 employees were approved for buyouts.
This deep cut affected many of the newly recruited probationary auditors, who were brought on board following a funding boost during President Joe Biden’s term.
The departures, subject to ongoing litigation, have raised questions about the legal and financial implications of such significant workforce reductions.
The contribution of these auditors cannot be understated. In fiscal year 2023, auditors recommended $32 billion in additional tax assessments.
The National Bureau of Economic Research reported that IRS audits generate $6 for every $1 spent on high-income taxpayer audits.
The loss of veteran staff could lead to decreased audit activities and subsequently higher tax evasion rates, leading to abysmal government revenue losses.
The Yale Budget Lab cautioned that these reductions might cost the government a net revenue loss of $159 billion over a decade, escalating to $1.6 trillion should taxpayer non-compliance spike.
Meanwhile, the White House’s fiscal 2026 budget anticipates $163 billion in non-defense savings, mainly toward a $119 billion military spending hike.
Critics argue that this economic trade-off could lead to a budget deficit increase due to a fundamental tax revenue loss.
Despite these sweeping changes, the reductions didn’t equally impact all IRS departments.
So far, only 5% of IT staff and 10% of customer service agents have departed, though they’re predicted to face future cuts.
As these downsized efforts continue, the true fiscal impact remains to be seen, leaving American taxpayers to question if the larger deficit will indeed be worth the touted savings from this reorganization.
IRS Lost 31% of Tax Auditors in DOGE Downsizing. Over 3,600 revenue agents, 18% of revenue officers, and 10% of tax examiners have left the agency, with the majority of cuts affecting newly hired probationary auditors.
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— Tax Adviser, CPA, MBA (@SmlBizCloud) May 5, 2025
