Former Treasury Secretary Lawrence Summers said that the Trump administration's moves to downsize the Internal Revenue Service, along with other changes, are likely to incentivize reduced tax-payment compliance — potentially costing the federal government $1 trillion in lost revenues over a decade.
"We are threatening the basis of our tax system, which is based on voluntary compliance," with the efforts to slash the IRS's staff, Summers said on Bloomberg Television's Wall Street Week with David Westin.
Summers said he's currently conducting analysis on the issue, along with colleagues he didn't specify. "I'd be surprised if we're not on a path to sacrificing more than $1 trillion of revenue over the next decade because of this misguided, wanton attack on the IRS," he said.
About 20,000 IRS workers, or roughly a fifth of the agency, opted to take a deferred resignation offer this month, Bloomberg reported last week. That came on top of about 4,700 employees who took an initial offer earlier this year. Roughly 7,300 probationary employees were separately put on administrative leave.
One of the other thieves apparently thinks this thievery goes to far!
Makes sense, fire everyone in the billing department and wonder why we go out of bizness.
The reason for DOGE going into the IRS is that only rich people can really cheat on taxes. Wage statements, and such follow the rest of us around and we really don't have a way of hiding earnings like Musk and the Trump family do.
IRS Lost 31% of Tax Auditors in DOGE Downsizing, Report Says
The Internal Revenue Service lost 31% of its auditors from buyouts and layoffs tied to Elon Musk's Department of Government Efficiency, departures that are likely to hamper the agency's ability to go after tax cheats.
More than 3,600 revenue agents — responsible for conducting audits — have left the IRS, according to an IRS watchdog report.
In addition, 18% of revenue officers, who collect taxes, and 10% of tax examiners — front-line employees who review returns — have also left the agency, the Treasury Inspector General for Tax Administration said in a recent report.
The IRS downsizing is due to a series of moves, spurred by Musk's DOGE, to cut the agency's workforce. More than 7,300 probationary employees were terminated. More than 4,100 workers took Musk's "Fork in the Road" resignation offer, followed by a second round of buyouts where more than 13,100 were approved to leave, according to the report.
The IRS had a large number of newly hired probationary auditors due to a funding boost under President Joe Biden, who increased funding for tax enforcement to rebuild the agency's depleted capabilities. That means the cuts targeting recent hires disproportionately affected those with auditing jobs.
The terminations have been the subject of ongoing litigation.
Treasury Secretary Scott Bessent on Tuesday defended the staffing cuts, saying the layoffs are "just taking the IRS back to where it was" before a bill that "substantially bloated the personnel and the infrastructure."
Scott Bessent's net worth is at least $521 million.