Trump’s Proposal to Slash IRS Workforce: A Cause for Concern

In a move that has raised eyebrows across the political spectrum, reports indicate that the Trump administration is considering a drastic plan to cut the Internal Revenue Service’s (IRS) workforce by half. This proposal has ignited fears among tax experts and former officials from both parties, who warn that such a reduction could severely undermine the agency’s ability to manage the tax system effectively.

The Potential Impact of Workforce Cuts

According to tax experts, slashing the IRS workforce would not only reverse recent efforts to modernize the agency but could also cripple its operations. The IRS is responsible for processing approximately 270 million tax returns annually, a task that requires a robust workforce. Charles Rettig, who served as IRS commissioner during Trump’s first term, expressed his concerns in an email to Yahoo Finance, stating, “Even with recent technological enhancements, every internal and external IRS function will be at risk.” He added that the agency would likely struggle to maintain basic service levels and compliance.

Recent Layoffs and Future Cuts

The IRS has already seen a reduction in its workforce, having laid off around 7,000 probationary employees as part of Trump’s broader initiative to reduce federal bureaucracy. This reduction has raised alarms about the agency’s ability to provide adequate service during the current tax filing season. Now, as reported, IRS leaders are contemplating an additional 50% cut to its workforce of roughly 90,000 employees. The IRS has not responded to requests for comment regarding these potential cuts.

Concerns from Tax Experts

David Kamin, a tax law professor at NYU and former economic adviser to President Joe Biden, highlighted the impracticality of operating the IRS with such a diminished workforce. He remarked, “We have not had an IRS that is like that in modern times, with the economy we have today and the tax code we have today. But it can’t function in any way like we’ve seen it function.” This sentiment underscores the gravity of the situation as experts grapple with the implications of such drastic cuts.

Efforts to Rebuild the IRS

During the Biden administration, Democrats made significant efforts to rebuild the IRS after years of budget cuts that had reduced its capacity to levels not seen since the 1970s. The Inflation Reduction Act allocated $80 billion to modernize the agency’s customer service and processing systems, aiming to recover an estimated $600 billion in unpaid taxes. This funding allowed the IRS to address many service issues that arose during the pandemic, including overwhelmed phone lines and delayed returns.

Among the improvements made, the IRS hired more customer support representatives, which significantly reduced the average wait time for phone calls from 28 minutes to just 3 minutes. Additionally, the agency worked to digitize more paper returns, which helped alleviate its notorious backlog. These efforts were crucial in enhancing the agency’s efficiency and responsiveness to taxpayers.

What Lies Ahead for Taxpayers?

As the IRS faces the possibility of further cuts, experts warn that taxpayers should brace for a decline in service levels. IRS Commissioner Danny Werfel indicated that performance could mirror or worsen than what was experienced during the COVID-19 pandemic, with only 1 in 10 calls answered and wait times exceeding 30 minutes. Moreover, the processing of paper returns could face significant delays, leading to months-long waits for taxpayers expecting refunds.

The Financial Implications of Slashing IRS Agents

Most experts agree that reducing the number of IRS agents could ultimately cost the government more than it would save. The potential loss of revenue from unpaid taxes could far outweigh any short-term savings achieved through workforce reductions. As the debate continues, the future of the IRS and its ability to serve the American public hangs in the balance.

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