A new report released Monday predicts the IRS will lose more than $500 billion in tax revenue over the next tax season as a result of actions taken by President Donald Trump and his top donor Elon Musk’s Office of Government Efficiency Group.
Washington Post Taxpayer behavior is affected following Trump’s actions to fire nearly 20,000 employees at the agency, reporting that internal systems are being affected. The IRS had to stop investigating tax evasion by wealthy taxpayers and large corporations. It grew under the Biden administration, leaving more staff to instead fill the gap left by Trump’s insanity change.
The data is already beginning to confirm disastrous predictions. In the current tax season, the IRS receives 1.7% less return than adopted at this same time in 2024.
Sources within the agency also said the IRS is seeing an increase in online chats from people who said they would submit to claim tax credits as ineligible (because there are fewer auditors to check the information), and from others who said they would not pay their obligations.
The administration was warned that this could happen. A senior IRS official has briefed Trump’s transition team and explained that revenues will be cut.
“A proactive reduction in budget and personnel capacity will result in a decline in backlogs, delays, reduced receipts, and reduced ability to build next-generation digital capabilities,” the presentation said.
Furthermore, the accidental methods the administration has used to purge federal employees often increase costs. Using fraudulent data).
IRS employees cut sometimes You will be involved in projects and initiatives aimed at retrieving outstanding taxes or improving the agency’s processes. This means that incomplete projects will cost more than short-term money the government no longer has to pay on pay.
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Lost Profits – Paying for Critical Government Services across the nation– A reversal from the recent improvements enacted by the Biden administration.
As part of the Inflation Reduction Act (which was unanimously opposed by Republicans in the House and Senate), the IRS I got a boost An agent is then tasked with collecting income that had not been paid by an extremely wealthy person. At the end of 2024, the IRS announced that another $1.6 billion had been brought in from these people the previous year.
The Biden Act also aims to start moving forward with the IRS modernization program and make taxpayers better.
Under Trump, the agency has now regressed –There is a lack of revenue. At the same time, Republicans I’m pursuing Tax cuts for wealthy people who just got the green light to avoid more taxation.
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