As tax season is in full swing, the Internal Revenue Service (IRS) is facing a significant exodus of employees. Under President Joe Biden, the IRS experienced growth in staff numbers, but has since decreased back to pre-Biden levels due to deferred resignations. This has raised concerns about the IRS’s ability to effectively carry out audits and collect unpaid taxes.
Despite the decrease in staff, the IRS has been focusing its audit efforts on corporations and wealthy taxpayers. President Biden allocated nearly $80 billion in new funding to the IRS to target unpaid taxes from the wealthy, arguing that every dollar spent auditing high-income households results in $4 in additional revenue. However, recent data shows that with a smaller staff, the IRS may generate significantly less tax revenue.
The leadership at the IRS has been in flux, with Acting Commissioner Melanie Krause resigning amidst controversy over sharing tax information with federal immigration agents. In addition, concerns have been raised about data privacy and security as the IRS faces pressure to share sensitive information with external entities like Elon Musk’s Department of Government Efficiency.
Experts warn that the IRS’s reduced staff numbers could have detrimental effects on revenue collection and taxpayer services. With ongoing changes and challenges at the agency, taxpayers are advised to ensure compliance with tax laws to avoid being selected for an audit.
