Approximately 6,700 IRS employees were dismissed on Thursday, right in the midst of tax season as the agency handles 140 million tax returns. The timing of these layoffs has raised concerns about the IRS’s ability to effectively process filings and enforce tax regulations.
The job cuts primarily affected newer, “probationary” employees who have fewer job protections compared to long-term staff, according to a report by Reuters. This move is part of the Trump administration’s broader effort to reduce government spending, a strategy strongly backed by the president’s key campaign donor, Elon Musk. Since taking office a month ago, Trump and Musk have aggressively pursued cost-cutting measures, including terminating thousands of government employees and offering buyouts to others.
However, experts argue that eliminating IRS tax collectors could ultimately cost the government more money. Yale Law professor Natasha Sarin pointed out to NPR that for every dollar the IRS spends on high-end enforcement, it recovers twelve dollars in unpaid taxes. Reducing staff could therefore weaken the agency’s ability to collect revenue, potentially benefiting wealthy individuals who exploit complex tax loopholes.
The downsizing of the IRS is expected to shift the agency’s focus away from high-income taxpayers and toward lower-income earners. University of Pittsburgh tax law professor Philip Hackney, a former IRS attorney, told Reuters that these cuts would ensure that the agency primarily targets low-income individuals while allowing wealthier taxpayers to avoid scrutiny. He described the decision as a major setback for fair tax enforcement.
Under former President Joe Biden, IRS funding was a priority, leading to the hiring of thousands of new employees during his tenure. Even Trump’s own former IRS commissioner, Chuck Rettig, criticized the layoffs, warning that an underfunded IRS would ultimately benefit noncompliant taxpayers at the expense of those who follow tax laws. Writing on LinkedIn, Rettig reiterated that enforcement funding yields a significant return on investment, further emphasizing the financial risks of reducing IRS personnel.
