The Trump administration’s plan to trim the IRS workforce has resulted in almost one-third of its tax auditors leaving the agency through March, according to a report from the U.S. Treasury Department’s watchdog.
Elon Musk’s Department of Government Efficiency, or DOGE, has sought to trim the federal workforce through a combination of layoffs and so-called deferred resignation. Musk, the billionaire CEO of Tesla, said on the electric vehicle maker’s April 22 earnings call that DOGE’s efforts “in addressing waste and fraud” will “get the country back on track.”
The IRS has been a focus of DOGE’s cost-cutting efforts, with plans to trim as much as 40% of its workforce this year. Through March, those efforts have resulted in the tax agency losing about 11% of its workforce, the May 2 report from the Treasury Inspector General for Tax Administration (TIGTA) found.
But revenue agents — the IRS workers who perform audits — have seen a much bigger hit, with 31% of those workers, or about 3,600 auditors, taking either the deferred resignation plan or getting fired in the first three months of 2025, the report found. Losing a large share of auditors could impact the federal government’s ability to collect tax revenue, given that these agents typically handle cases involving wealthy taxpayers or corporations, experts say.
“You lose the very staff trained to keep high-end taxpayers and corporate tax payers in compliance,” noted Emily DiVito, senior adviser on economic policy at the left-leaning Groundwork Collaborative and a former policy adviser at the U.S. Treasury Department, which oversees the IRS.
She added, “You can see some behavioral effects when taxpayers, especially those that really don’t want to pay their bills, come to accept there is very little risk to not paying at all, or even filing.”
Reached for comment, a Treasury spokeswoman said, “The Biden Administration grew the IRS from 79,431 to 102,309 personnel. Under new leadership, approximately the same number of employees have left the IRS, with a vast majority leaving voluntarily through the Deferred Resignation Program. The roll back of wasteful Biden-era hiring surges, and consolidation of critical support functions are vital to improve both efficiency and quality of service. The Secretary is committed to ensuring that efficiency is realized while providing the collections, privacy, and customer service the American people deserve.”
The White House didn’t immediately return a request for comment about the TIGTA report.
While the TIGTA report didn’t explain why auditor departures outpaced that of overall cuts at the IRS, the tax agency had made an effort under the Biden administration to hire more auditors in order to beef up revenue collection. In February 2024, the IRS had said it expected to collect hundreds of billions in additional taxes after using funding from the Inflation Reduction Act to hire more auditors.
Because the DOGE cuts have focused on firing so-called “probationary workers,” or junior federal employees who typically have less than a year or two on the job, there may have been more newly hired auditors who were impacted by the reductions, DeVito said.
Reducing federal revenue?
Auditing wealthy Americans and corporations can be lucrative for the federal government. In fiscal year 2023, auditors recommended an additional $32 billion in tax assessments, the TIGTA report said.
And every $1 spent on auditing the top 0.1% of earners can return about $26 in tax revenue, according to an analysis from Better IRS, an advocacy group for free tax filing.
The cuts to the IRS’ auditing force raises questions about the effectiveness of DOGE’s efforts, given that the tax agency is responsible for collecting the bulk of the nation’s revenue, DeVito added.
The combination of individual and corporate income taxes provides about 60 cents for every $1 in federal revenue, with the remaining 40 cents coming from payroll taxes and fees, such as paying admission to national parks, according to the Treasury Department.
DOGE’s cost-cutting efforts may end up costing almost as much as they’ve saved, according to an analysis last month from the nonpartisan research group the Partnership for Public Service.
DOGE claims to have saved $165 billion, but the Partnership for Public Service estimates that the savings have come at a cost of $135 billion due to paid leave, re-hiring mistakenly fired workers and lost productivity. That figure also excludes the impact of multiple lawsuits filed against DOGE’s actions, as well as lost tax revenue due to IRS cuts, the group said.
The IRS could forego $323 billion in tax revenue over the next decade due to lower tax compliance and a decline in audits, according to an estimate from the Yale Budget Lab.
“The argument from DOGE is to save money — that if we don’t have as big of a federal workforce, then we are saving the government money,” DeVito said. But given the potential to lose out on tax revenue, the IRS reduction “simply doesn’t make sense,” she said.
