President Donald Trump says he wants to close the federal budget deficit, but his administration is slashing staffing at the agency that collects the government’s money.
Early rounds of cuts at the Internal Revenue Service have eliminated nearly one-third of its auditors, according to a report from the Treasury Inspector General for Tax Administration.
As of March 2, some 31% of the agency’s revenue agents—more than 3,600 people—had either been fired or taken a buyout, according to the report. Revenue agents conduct audits of individuals or corporations. Another 600 revenue officers, who act as debt collectors for the government, have departed. Overall, 11% of the IRS’ staff has left. And much greater cuts are coming, according to reports.
“There have never been cuts to the IRS on this order—never,” said Vanessa Williamson, senior fellow at the Urban-Brookings Tax Policy Center.
“There’s going to be a lot more leeway when it comes to tax enforcement,” she told Fortune. “It’s basically Christmas coming early if you cheated on your taxes this year.”
The White House and Treasury did not respond to requests for comment from Fortune.
Already, many large, complex audits that started during the Biden administration are being abandoned from lack of staff, the Wall Street Journal reported. The division that audits the ultra-rich, called Global High Wealth, has lost 38% of its staff, according to the International Consortium of Investigative Journalists.
Beefing up the ranks of the IRS’ enforcers was a priority under the Biden administration; because of this, relatively more employees in these divisions are newer, making them easier to fire, ICIJ reported.
The attempted firings of tens of thousands of probationary workers is still being fought in the courts. The Supreme Court last month allowed the firings to go forward while lawsuits disputing their legality play out.
The cuts come as Trump and the so-called Department of Government Efficiency move to slash large portions of the federal government, ostensibly as a cost-saving measure. But critics charge that slashing the IRS is a poor way to do so. The agency brings in 96% of the nation’s revenue, but it more than pays for itself, with $1 spent on IRS enforcement yielding a return of $5 to $9, according to the Congressional Budget Office.
Even as the IRS’ ranks are thinning, the agency has imposed on remaining staff to work mandatory overtime on weekends to process a backlog of returns, according to the Federal News Network. And the Trump administration has targeted even deeper cuts, with as many as 40% of IRS jobs on the chopping block, according to FNN.
Starving the IRS could punch a hole in the government’s balance sheet. Already, around $700 billion in taxes owed go unpaid every year, largely in the highest-income brackets. Cutting the IRS in half would likely supercharge tax evasion and could cost $2.4 trillion to the federal budget over the coming decade, according to the Yale Budget Lab. It cautioned that the estimates were uncertain, however.
“[T]here is no modern historical precedent for this level of cuts to IRS staffing: It is unclear how the IRS would be able to actually function given the scale of what has been reported,” the lab wrote.
“Returning the IRS to a 1960s-level workforce in an environment when tax entities have become much more complex and its capacity is already so depleted could potentially meaningfully shift taxpayer behavior.”
This story was originally featured on Fortune.com
