The massive trimming of the IRS have insiders projecting the federal government will see a dip of nearly 10% in projected revenue in the coming year, The Washington Post reported.
Treasury Department and IRS officials speaking on a condition of anonymity told the outlet they are expecting upward of $500 billion in lost revenue compared with 2024 receipts, or nearly two-thirds the annual defense budget.
Natasha Sarin, president of the Yale Budget Lab and a senior Biden administration tax official, told the Washington Post, "The idea of doing that in one year, it's hard to grapple with how meaningful of a shift that represents."
Earlier in the week, it was reported that the Trump administration, under the advice of Elon Musk's Department of Government Efficiency, was set to lay off more than 20,000 IRS workers, aiming to trim nearly 20% of its current staff by mid-May.
Observers are concerned many individuals and business may skip the annual filings or forgo balances as the public reacts to changing attitudes toward the IRS. The firings have also forced the IRS to cancel several large audits, with some recent IRS hires saying their initial momentum to collect taxes from some large companies is gone.
"The thing that I think is really alarming is if this data ends up telling a story about how this filing season is evolving, and you're seeing it happen in real time," Sarin said. The IRS has reportedly noticed an increase in online chatter of individuals openly planning to double down on skeptical tax exemptions or neglect paying federal taxes all together.
The outlet reported that while natural disasters such as the Los Angeles fires and individual economic hardship could delay some filings, it would not nearly account for the projected 10% drop in revenue. If the federal government loses half a trillion in tax revenue it will only add to the national debt, which already sits at $36.2 trillion.
In January, Trump signed a "cease and desist" order for the IRS which the administration called "a crucial first step to helping middle-class Americans" abandon the fear caused by caused the Biden administration's hiring of 87,000 new IRS agents.
James Morley III ✉
James Morley III is a writer with more than two decades of experience in entertainment, travel, technology, and science and nature.
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