The ax man is coming for the tax man.
According to new reports, the Internal Revenue Service, which ballooned during the administration of former President Joe Biden, is facing cuts that could reduce its workforce by up to 50 percent, according to the Associated Press.
Reducing the government workforce across the board has been a major priority in the first weeks of the Trump administration, with the Department of Government Efficiency targeting areas that administration officials can cut.
The IRS will use layoffs, attrition, and buyouts to reduce its staff, the AP reported, citing sources it did not name.
The IRS currently has about 90,000 employees.
The staff reduction began last month with the departure of about 7,000 employees who were on probationary status.
John Koskinen, a former IRS commissioner, said cuts that reach tens of thousands would make the IRS “dysfunctional.”
The New York Times reported that two analysts from DOGE have been working at IRS headquarters in Washington for the past two weeks and said they have been seeking information on the agency’s contractors.
Federal agencies are facing a March 13 deadline to submit plans for staff reductions.
Should the IRS be cut in half?
According to the Federal News Network, IRS employees have been summoned to return to their offices by March 10, ending what for many has been years of remote work.
In February 2024, Reuters reported that in 2023 and early 2024 the IRS hired about 5,700 people.
In a July letter last year Republican Sen. Joni Ernst of Iowa said an audit by the Treasury Inspector General for Tax Administration found that 5,800 employees of the IRS and its contractors owe almost $50 million in overdue taxes.
“Surely the irony and hypocrisy can’t be missed here: taxpayers are being forced to pay billions more to the IRS to audit America while the agency won’t even collect the tens of millions of dollars in unpaid taxes owed by its employees,” she wrote.
Also last year, the Treasury Inspector General for Tax Administration noted that the IRS had conflicts of interest in the form of employees who received income from either a large accounting firm or corporation “either prior to joining, during their time at, or after leaving the IRS.”
A 2021 report by The New York Times indicated that large accounting businesses were already embedded within the IRS.
The Times summarized its findings this way: “Their tax lawyers take senior jobs at the Treasury Department, where they write policies that are frequently favorable to their former corporate clients, often with the expectation that they will soon return to their old employers. The firms welcome them back with loftier titles and higher pay.”
“From their government posts, many of the industry veterans approved loopholes long exploited by their former firms, gave tax breaks to former clients and rolled back efforts to rein in tax shelters — with enormous impact,” it wrote.
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