IRS workforce cuts could cost the US hundreds of billions in lost revenue

The IRS is scaling back enforcement as staffing cuts ripple through the agency, fueling concern that fewer audits and reduced oversight could embolden tax avoidance, The Wall Street Journal writes.

Since President Donald Trump’s return to office, the agency has shed thousands of enforcement workers, with further cuts proposed that would shrink the workforce below 30,000—down sharply from recent peaks. Audits of high-income earners and complex entities are declining, and overall enforcement spending has fallen to its lowest level in decades.

The pullback is already shifting taxpayer behavior, with lawyers reporting a growing belief that the risk of being caught is diminishing. While enforcement revenue has ticked up in the short term, experts warn the long-term cost could be steep. Estimates suggest cuts could reduce federal revenue by hundreds of billions over the next decade, far outweighing any savings.

The administration says it plans to modernize enforcement through technology and improved taxpayer services, but critics argue understaffing weakens compliance.

The Wall Street Journal has the full story.