Lora Kelley writes:

Tax season is always a busy time at the IRS. This year has been especially eventful. In February, the agency was told to start firing up to 7,000 workers—before judges ordered that such firings needed to be paused. Some 5,000 more workers have signed up for the government’s deferred-resignation offer, and various departments have been slashed or targeted for cuts. About 50 IT workers were put on administrative leave Friday. Overall, The Washington Post reported, the agency will end May with about 18 percent fewer employees than it had at the start of this year. And people familiar with the matter told The New York Times that the Trump administration’s ultimate goal is to cut the agency’s staffing by half.

The stated purpose of these firings, and of DOGE’s other cuts across federal agencies, is to save money. But the cuts may actually translate to a meaningful dip in taxpayer revenue. The IRS is effectively the government’s accounts-receivable department. Staffing cuts set up the IRS to lose money in two ways, Natasha Sarin, a Yale law professor and former Treasury counselor, told me: A reduced IRS has less capacity to collect and enforce taxation, and taxpayers who think they won’t be audited may be more inclined to start cheating. Sarin expects that the agency’s losses will far outweigh the $140 billion DOGE says it has saved (DOGE’s self-reported data is opaque and has been full of errors). She and her colleagues at the Budget Lab at Yale forecast that the plan to cut half of the agency’s workforce alone would conservatively translate to $395 billion in lost revenue in the next decade, and possibly up to $2 trillion. [Continue reading…]