Staff reductions ordered under President Donald Trump’s government-wide downsizing effort are stalling major ongoing audits, and the IRS is unlikely to bolster its enforcement division anytime soon.
According to The Wall Street Journal, this slowdown could result in tens of billions of dollars in unpaid taxes going uncollected. It also effectively dismantles a Biden-era initiative aimed at expanding IRS staffing—making it easier for taxpayers to reach agents by phone, access walk-in centers, and increasing oversight through audits.
So far, the IRS has let go of 7% of its workforce and implemented a hiring freeze. Additional cuts are expected in the coming months. At the same time, Congress has rolled back nearly all of the enforcement funding that was approved for the agency in 2022.
The cuts could prove beneficial for corporations and wealthy individuals, who are more likely to face IRS scrutiny. Trump has frequently referenced his own disputes with the IRS and previously cited an ongoing audit as the reason for not releasing his tax returns during earlier campaigns.
Trump administration officials have downplayed concerns about the audit impact. Treasury Secretary Scott Bessent told NBC on Sunday, “We are doing a big review. I have three priorities for the IRS: collections, privacy, and customer service. And we’ll see what level is needed to prioritize all those.”
The Senate has yet to hold confirmation hearings for Bill Long, Trump’s pick to lead the IRS.
In the meantime, The Wall Street Journal reports that audits of two high-net-worth individuals were recently closed without any demand for back taxes. In another case, a long-running audit of a corporation was abruptly settled after the assigned agent revealed he was leaving the agency and asked the company’s lawyer for a best offer.
