Watchdog Report Reveals Major Loss of Tax Auditors Due to DOGE Reductions

A recent watchdog report highlights that almost a third of the IRS's tax auditors have left the agency as a result of extensive reductions linked to DOGE, affecting its operational capacity.

According to the Treasury Inspector General for Tax Administration's report issued on May 2, the Internal Revenue Service's personnel decreased by approximately 11% due to termination of probationary employees and unspecified other reasons as of March 2025.

Specific departments, particularly those comprising 'revenue agents,' saw a more severe impact. By March, the IRS had lost 3,623 of these agents, amounting to a 31% drop as specified in the report.

Federal Budget Changes and Their Impact

The same day as the report's release, President Donald Trump proposed the fiscal year 2026 budget, which plans to cut nearly $2.5 billion from the IRS, intended to terminate what some see as the aggressive approach of IRS enforcement.

U.S. Treasury Secretary Scott Bessent indicated during a House Appropriations subcommittee meeting that the agency's IT budget was reduced by $2 billion without hindering operations.

Despite reductions, as of April 25, the IRS managed to exceed the previous year's tax filing season in terms of returns processed, according to their data.

An inquiry was put forth by CNBC regarding the TIGTA report, yet the Treasury did not provide any comments.

Potential Advantages for the Wealthy Amid IRS Cuts

A group of over 130 Democratic members of the House expressed their concerns in a letter addressed to former acting IRS commissioner Melanie Krause. They warned that staff reductions could weaken the agency's capacity to combat tax evasion among the wealthy.

These reductions could hinder the IRS's efforts to enhance collection processes and address complex tax evasion by affluent individuals and large enterprises.

Research from 2023 involving the Treasury, MIT, the Wharton School, and the University of Sydney showed that audits of the top 0.1% pay a substantial return for every dollar spent.

During the subcommittee hearing, Bessent discussed priorities like 'collections,' emphasizing an aim to meet revenue predictions through advanced IT solutions and artificial intelligence over relying on traditional collection officers.

"I anticipate robust collection outcomes continuing," Bessent remarked confidently.