Tax enforcement weakened after Trump job cuts, IRS data shows
Tax enforcement weakened after Trump job cuts, IRS data shows
By Jacob BogageWed, April 15, 2026 at 4:17 PM UTC
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FILE PHOTO: The Internal Revenue Service (IRS) building is seen in Washington, U.S. September 28, 2020. REUTERS/Erin Scott/File Photo
By Jacob Bogage
WASHINGTON, April 15 (Reuters) - The Trump administration dramatically reduced efforts to pursue tax cheats in 2025, government data shows, shedding tens of thousands of employees at the Internal Revenue Service, including those charged with enforcement.
The result was a 5% decline in revenue collected through enforcement actions, or almost $5 billion, in the fiscal year, according to data obtained by Reuters through the Freedom of Information Act. The agency opened more than 120,000 fewer tax audits in 2025 than in the year prior, the Taxpayer Advocate Service, the IRS' internal watchdog, reported.
The vast majority of revenue collected through tax enforcement comes from unpaid balances. Audits are often years-long processes that do not immediately yield revenue.
Treasury Department officials told Reuters that the IRS has seen a 12% increase in enforcement revenue in the first five months of the 2026 fiscal year, which began October 1.
The Department of Government Efficiency, the now-defunct cost-cutting agency created by President Donald Trump and led by billionaire Elon Musk, oversaw mass staffing cuts at the IRS that carved into every aspect of the tax agency.
But the IRS’s enforcement arm lost roughly 5,000 of its employees headed into 2026 and is on track to cut another 5,000 in the coming year, according to the agency’s budget projection.
Frank Bisignano, the CEO of the IRS and Social Security Administration Commissioner, told the Senate Finance Committee on Wednesday that the tax agency was reviewing the "tax gap," or the amount of taxes owed but not paid, to see what quantity is "addressable."
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Completely eliminating the tax gap, experts say, would require the IRS to act far more aggressively than Americans are generally used to.
Bisignano said he would soon return to the committee with "a plan to drive the number down and you'll have the resources allocated and the technology" to recoup the unpaid sums.
The moves at the IRS essentially wipe out one of the Biden administration’s signature achievements, sending tens of billions of dollars to the agency to increase tax scrutiny of major corporations and wealthy individuals.
At its height during the Biden administration, the IRS employed 103,000 people, according to the Treasury Inspector General for Tax Administration. It aims to employ about 69,000 by the 2027 fiscal year, which begins October 1.
Before that infusion of cash, the IRS had struggled for years with its finances as Republicans in Congress blocked funding for the agency intended to help it maintain its outdated technology systems and retain high-skilled staff.
That led the IRS to move enforcement away from businesses and wealthy individuals and toward low-income taxpayers whom it costs less to audit, the Taxpayer Advocate Service has reported.
"I think that the agency has suffered potentially irreparable harm because it wasn’t as if we were starting off from a system of tax administration that was modernized and set up to pursue compliance on the high end of the income spectrum," said Natasha Sarin, the president and cofounder of the Yale Budget Lab, a financial think tank.
(Reporting by Jacob Bogage, Editing by Nick Zieminski)
Source: “AOL Money”
