The Blubber

IRS to Cut Over 6,000 Jobs Amid Tax Season Shake-Up

The Internal Revenue Service (IRS) is laying off more than 6,000 workers in the middle of one of the busiest tax seasons of the year.

The cuts are part of a government-wide downsizing spearheaded by Elon Musk’s deputies at the informal “Department of Government Efficiency.”

Layoffs Hit IRS at Critical Time

IRS employees were notified Thursday about the pending job cuts, which primarily affect probationary workers—employees who had only been on the job for a limited period.

Coming right in the middle of tax season, the layoffs could make it harder for taxpayers to get assistance and for the government to collect all the taxes it is owed.

Government watchdogs warn that cutting IRS staff will weaken efforts to crack down on tax evasion by the wealthy.

“It’s just so counterproductive if your goal is to save money and be efficient. This is not what any rational person would do.”
– Susan Long, IRS audit data expert at Syracuse University

IRS Struggles with Funding Battles

For over a decade, the IRS has been underfunded, leading to long wait times for customer service and a dramatic decline in audits of millionaires, while low-income taxpayers faced increased scrutiny.

A turnaround began in 2022, when congressional Democrats passed the Inflation Reduction Act, allocating $80 billion over ten years to modernize IRS technology and increase staffing. However, Republicans later slashed at least 25% of that funding.

The funding boost had already made a difference, allowing the IRS to hire thousands of phone operators and revenue agents to pursue unpaid taxes. Now, many of those recent hires are on the chopping block.

Experts Warn of Higher Costs Than Savings

Tax policy experts argue that cutting IRS enforcement staff will result in more lost tax revenue than it saves in salaries.

“For every $1 the IRS spends on high-end enforcement activity, the agency collects $12 in unpaid taxes.”
– Natasha Sarin, Yale Law Professor & former tax policy adviser

With fewer IRS employees to process returns, answer questions, and conduct audits, the government risks losing billions in uncollected tax dollars—a cost far outweighing the short-term savings from layoffs.