The U.S. loses an estimated $1 trillion in unpaid taxes every year. Cutting Internal Revenue Service staff will only make this worse. While proponents of downsizing the IRS argue that reducing bureaucracy saves taxpayer dollars, the reality is that weakening the IRS will embolden tax cheats, widen the tax gap and shift the burden onto honest taxpayers.
President Trump’s lay-off plan for IRS employees is part of Elon Musk’s government-wide bureaucratic culling by the Department of Government Efficiency. It could axe up to 7,000 agency staff. Worse, it threatens to expose even greater weaknesses in tax enforcement, increasing opportunities for tax evasion. Tax compliance is largely driven by a mix of civic responsibility and the likelihood of being audited; if enforcement weakens, fewer people will feel compelled to pay their fair share.
The IRS has faced significant staffing cuts for more than a decade. Since 2010, budget cuts and attrition have reduced the IRS workforce by 16 percent, including a 30 percent decline in full-time enforcement staff, with 17,000 enforcement personnel lost. Examining revenue agents are down by 35 percent and field collection officers have lost 48 percent; both handle especially complex cases. Cutting even more personnel will further cripple the IRS’s ability to detect tax fraud, particularly among wealthy individuals and corporations that have the means to exploit loopholes.
Recent reports highlight a troubling trend: IRS audit rates have declined dramatically, particularly for high-income earners. A ProPublica investigation found that audits of millionaires have dropped by more than 70 percent in the last decade, while lower-income taxpayers receiving the Earned Income Tax Credit are audited at disproportionately high rates. This is not due to intentional bias but rather because auditing the wealthy requires resources that are already stretched thin.
Auditing should be conducted randomly or in proportion to the total tax burden, but certainly not in reverse. Further job cuts would widen this gap, allowing large-scale tax evasion to go unchecked while small-scale errors among lower-income taxpayers continue to be targeted.
A weakened IRS translates to fewer audits, fewer compliance checks and, ultimately, more lost revenue. That revenue shortfall leads to higher deficits, potential cuts in essential public services, or increased taxes on compliant taxpayers to make up the difference.
A visibly weakened enforcement agency also sends a dangerous signal: tax evasion is easier and less likely to be caught. Studies consistently show that the perceived risk of detection heavily influences compliance. Countries that have slashed tax enforcement agencies have seen compliance rates drop as a direct consequence.
Slashing IRS jobs does not help the average taxpayer. It benefits those who are already adept at gaming the system: wealthy individuals and large corporations who can afford teams of accountants and tax lawyers. The complexity of the tax code allows them to structure income in ways that make it difficult for a weakened IRS to detect underreporting.
Meanwhile, everyday taxpayers — especially those relying on IRS services for filing assistance, refunds and payment plans — will face longer wait times and increased frustration due to understaffing. The IRS plays a crucial role in helping taxpayers navigate the system, not just enforcing compliance.
Instead of cutting jobs, policymakers should focus on modernizing and strengthening the IRS. Investing in updated technology, expanding staff training and ensuring adequate personnel for audits and enforcement would improve efficiency while maintaining compliance rates. The Inflation Reduction Act’s provisions for IRS funding, aimed at hiring more enforcement agents and modernizing outdated systems, represent a step in the right direction. Rolling back these efforts in the name of “cutting bureaucracy” would be a costly mistake.
Rather than seeing the IRS as a bureaucratic burden, it should be recognized as an essential institution for maintaining fairness in the tax system. Ensuring that all taxpayers pay what they legally owe, regardless of income, is not about political ideology — it is about preserving the integrity of the nation’s financial system.
Cutting IRS jobs may sound appealing to some, but the long-term consequences could be disastrous. A weaker IRS means more tax cheating, less revenue, larger deficits and greater inequities in tax enforcement. If policymakers truly want a fairer and more efficient tax system, they should focus on strengthening, not dismantling, the IRS. Enforcing tax laws fairly and effectively benefits all Americans — not just those who can afford to exploit a weakened system.
Abu Bakkar Siddique is an assistant professor at Florida Atlantic University, with a focus on tax evasion, tax enforcement and public economics.
