A big exodus of IRS employees is underway during the heart of tax season as thousands of workers leave through deferred resignations.
A Treasury Department spokesperson said Tuesday that the Internal Revenue Service grew from 79,431 employees to 102,309 under President Joe Biden and the agency has shrunk back to its pre-Biden size in recent weeks, mostly through deferred resignation buyouts.
CNN reported Tuesday that the IRS is currently down to 90,000 employees and will lose another 22,000, citing two anonymous sources.
The IRS expanded staff under Biden, including around 16,000 probationary workers, in an effort to further audit corporations and wealthy taxpayers.
Biden added nearly $80 billion in new IRS funding, largely to collect unpaid taxes from the wealthy. Republicans decried the audit campaign as an assault on middle-class Americans and small businesses.
According to the IRS in 2023, it was not increasing audit rates on households making less than $400,000 per year, which corresponds to roughly the top 2% of taxpayers. Research shows that every dollar spent auditing a household making more than $400,000 brings in $4 in additional revenue, so the Biden administration argued that the increased IRS enforcement actually saved the government money. A recent analysis by researchers at Yale University found if the IRS lost 18,200 workers it would spend $1.4 billion less but the smaller staff would generate $8.3 billion less in tax revenue.
President Donald Trump has been slashing spending across the federal government through the Department of Government Efficiency, led by Elon Musk. The IRS has been in turmoil, with three leaders since January.
Acting IRS Commissioner Melanie Krause is among those resigning. Her departure comes after the agency agreed to share tax information with federal immigration agents to help them find immigrants in the United States illegally.
DOGE also has sparked data privacy and security concerns by seeking access to internal IRS computer systems with vast amounts of sensitive data.
The big staff reductions at the IRS have raised concerns about the agency’s direction.
“I worry that this Administration’s destructive initiatives at IRS will cost the federal government hundreds of billions of dollars in revenue while putting taxpayer services and privacy at risk as critical employees are either laid off or see no alternative but to resign their posts,” Chye-Ching Huang, executive director of the Tax Law Center, a research center at New York University, said in a statement.
Contributing: Daniel de Visé, Anthony Robledo
