IRS cuts over 6,000 jobs in the middle of tax season

The Internal Revenue Service, better-known as the IRS, is cutting more than 6,000 jobs in the middle of a busy tax season.

The cuts are part of a widespread downsizing throughout the federal government, being led by Elon Musk’s deputies at the informal “Department of Government Efficiency.”

IRS employees were notified about the looming job cuts on Thursday. Most of the people affected are “probationary” workers who had been on the job for a limited time.

Landing right in the middle of the tax season, the job cuts are expected to make it harder for taxpayers to get questions answered and for the government to collect all of the money it’s owed.

The move drew protests from government watchdogs, who worry it will compromise the government’s ability to go after wealthy tax cheats.

“I just shook my head sadly,” said Susan Long, who founded a data collection group at Syracuse University that tracks IRS audits. “It’s just so counter-productive if your goal is to save money and be efficient. This is not what any rational person would do.”

For more than a decade, the IRS was starved for resources. Customer service suffered, with nine out of 10 phone calls going unanswered. Audits of millionaires plunged, while the government scrutinized taxpayers who claimed a credit for the working poor.

That began to change in 2022, when Congress passed the Inflation Reduction Act, which provided $80 billion over a decade to modernize technology and add staff at the IRS. While some of that funding was later reduced, thousands of additional telephone operators were hired. And new revenue agents began hunting for unpaid taxes. Many of those new hires are now on the chopping block.

Tax experts say any salary savings from the job cuts will be dwarfed by the lost tax revenue that otherwise would have been collected.

“For every $1 that the IRS spends on high-end enforcement activity, the agency collects $12 in uncollected taxes,” said Natasha Sarin, a professor at Yale Law School who served as an advisor on tax policy during the Biden administration.

She warned that the job cuts carried out in the name of efficiency will backfire.

“What you’re doing is making it harder for us to make progress on waste, fraud and abuse, making the system more inequitable, and ultimately costing trillions of dollars in tax revenue which is owed to the government but which is uncollected,” Sarin said.

The union representing IRS workers has asked a judge to halt the job cuts.

“Indiscriminate firings of IRS employees around the country are a recipe for economic disaster,” said Doreen Greenwald, president of the National Treasury Employees Union. “Much of the IRS workforce is outside of the Washington D.C. area, which means these layoffs are disrupting their local economies and hurting middle-income families in every state.”

The Trump administration defended the layoffs.

“There are more than 100,000 people working to collect taxes, and not all of them are fully occupied,” said Kevin Hassett, director of the president’s National Economic Council. He also noted that the IRS job cuts represent a small fraction of the overall layoffs engineered by Musk and his DOGE team.