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30-Second Take

• The IRS is cutting over 6,000 jobs in the midst of tax season, part of a broader federal workforce downsizing led by the current administration.
• Most affected employees are probationary workers who had been on the job for a limited time.
• These cuts are expected to hinder taxpayer services and tax collection efforts.

Quick Brief

2-Minute Digest

Essential Context

The IRS, already strained from over a decade of resource shortages, is now facing significant job cuts. This comes after Congress passed the Inflation Reduction Act in 2022, which had provided $80 billion over a decade to modernize the IRS and hire additional staff. However, these new hires are now among those being laid off.

Core Players

• Elon Musk’s deputies – Leading the informal “Department of Government Efficiency”
• President Trump – Associated with the current administration’s downsizing efforts, though not currently in office
• Natasha Sarin – Yale Law School professor and former tax policy advisor during the Biden administration
• Doreen Greenwald – President of the National Treasury Employees Union

Key Numbers

• 6,000+ – Jobs being cut at the IRS
• 100,000 – Total IRS workforce before cuts
• $80 billion – Funding provided by the Inflation Reduction Act over a decade
• 12:1 – Ratio of tax revenue collected to every dollar spent on high-end IRS enforcement

Full Depth

Complete Coverage

The Catalyst

The current administration’s push for federal workforce downsizing has led to the IRS cutting over 6,000 jobs. This move is part of a broader effort to reduce government spending and streamline operations.

“Indiscriminate firings of IRS employees around the country are a recipe for economic disaster,” said Doreen Greenwald, president of the National Treasury Employees Union.

Inside Forces

The IRS had begun to recover from years of underfunding with the passage of the Inflation Reduction Act in 2022. However, the latest job cuts undermine these efforts, particularly impacting new hires and probationary workers.

Tax experts argue that these cuts will be counterproductive, as the IRS will lose more in uncollected tax revenue than it saves in salaries.

Power Dynamics

The decision to cut jobs has sparked significant criticism from government watchdogs and tax experts. Natasha Sarin, a Yale Law School professor, noted, “For every $1 that the IRS spends on high-end enforcement activity, the agency collects $12 in uncollected taxes.”

This underscores the potential long-term financial and operational impacts of the job cuts.

Outside Impact

The job cuts are expected to have a “catastrophic impact” on the current tax filing season. Taxpayers will face delays in getting questions answered and receiving refunds. Additionally, the IRS’s ability to investigate and collect unpaid taxes will be compromised.

Senate Democrats have expressed concerns about these impacts and have requested clarification on the exemptions from the hiring freeze, particularly for positions related to national security, public safety, and Criminal Investigation staff.

Future Forces

In the coming weeks, the IRS will likely struggle to maintain its services. The union representing IRS workers has asked a judge to halt the job cuts, citing the devastating impact on local economies and middle-income families.

Long-term, the IRS may face further workforce reductions due to retirements and high attrition rates in customer service positions. This could exacerbate existing challenges in taxpayer services and revenue collection.

Data Points

• Feb. 20, 2025: IRS employees notified about job cuts
• 2022: Inflation Reduction Act passed, providing $80 billion for IRS over a decade
• 9 out of 10: Phone calls to the IRS went unanswered in recent years due to resource shortages
• 16-36%: Attrition rate in IRS customer service division