IRS labor cuts: America’s richest celebrations as Donald Trump and Elon Musk push deep cuts

The IRS department, which audits billionaires and other super healthy people, called the global high-wealth sector, lost 38% of the workforce this year. This is a huge reduction in the Trump administration’s efforts to narrow the federal workforce, according to the latest data from the International Union of Investigative Journalists (ICIJ). Prior to these cuts, the office hired 353 employees, but now only 220 employees. The decline in employees is significantly higher than the overall IRS loss rate, which affects the department’s ability to effectively audit the wealthiest Americans.

Unfinished review and stagnant cases

The reduction in labor has resulted in ongoing audits by many unfinished high-net-worth individuals, causing cases to stagnate or close. Under anonymity, several existing agents from the High Power Department said the situation had caused significant disruption to the situation. These audits are critical to ensuring a super healthy share of tax revenue, as they often rely on complex tax structures and vulnerabilities.
Losses from many experienced agents slowed down the pace of audits and in some cases they stopped auditing altogether. Under the Inflation Reduction Act of 2022, the IRS had previously audited the rich in efforts to audit the rich, which allocated $80 billion in additional funds to strengthen tax enforcement. But Republican lawmakers cut that budget in half, and the IRS’s ability to conduct audits is now under pressure due to these labor cuts.

Impact of termination and buyout

The recent termination was particularly affected by the global high wealth sector. Many of the employees who lost their jobs were probation workers, hired in the Biden administration initiative to strengthen the department. These employees often have years of experience in complex tax laws, which caused significant losses to their departure.

Duncan Giles, director of the National Treasury Employees Union Chapter 49, stressed that these agents are key to generating a large number of tax adjustments, sometimes reaching millions of dollars. Losing them means the government loses revenue. According to the data, about 13% of the unit’s losses came from voluntary acquisitions, while the rest came from termination of probation workers.

The data also suggest that job losses tend to be greater in the IRS’s field of practice through the physical practice, which oversees complex financial instruments often used by the wealthy to hide their assets. So far this year, the entire office has lost 27% of its labor force, further complicating efforts to address high-income taxpayers.

Uncertainty and the risks of further reduction

Agents in the High Capacity Department reported a sense of uncertainty, and management is working to adapt to the layoffs. Current and former agents have shown that a sharp reduction may lead to team consolidation, further slowing down the audit process. Some agents point out that this situation may inadvertently benefit from wealthy taxpayers who owed taxes, as few resources can be used to investigate their financial activities. The future of the unit is unclear as rumors continue to circulate about additional layoffs.

FAQ:

Why did the IRS lose so many employees?
The IRS has experienced significant layoffs due to budget cuts, mainly due to the Trump administration’s focus on reducing the drivers of federal staff. Many employees were terminated after probation, while others accepted the acquisition.

How does this affect the IRS’ ability to audit wealthy people?
The loss of skilled agents in the global high-wealth sector responsible for auditing billionaires and super healthy individuals has resulted in unfinished audits and stagnant cases. This hinders the IRS’ ability to enforce tax compliance among high-income taxpayers.