By Matt Durr
mlive.com
(TNS)
WASHINGTON — Officials are preparing for a possible $500 billion decline in collected tax revenue this year due to ongoing staff cuts and shifts in taxpayer behavior. According to The Washington Post, three people with knowledge of tax projections say the loss would represent a 10% drop in revenue collected over last year.
Last year, the IRS collected approximately $5.1 trillion in tax revenue.
The officials say the projected losses are tied to President Donald Trump’s efforts to reduce staff at the Internal Revenue Service. Since taking office, the Trump administration has moved to fire 20,000 IRS employees. An estimated 11,000 cuts have already been made; however, ongoing lawsuits may change the employment status of some of those workers.
- Related article: IRS Probationary Employees Who Were Laid Off Get Reinstated—But Put on Paid Leave
- Related article: IRS Workforce Could Be Slashed By Half, Reports Say
Many of the cuts made involved new hires in the taxpayer services and enforcement divisions, according to The Post. Agency employees say the IRS has already dropped investigations that were focused on high-value corporations and taxpayers.
With staff cuts causing possible issues, some taxpayers and businesses are banking on a lack of enforcement. Officials have seen an increase in taxpayers openly saying they aren’t filing this year, while others are claiming credits and deductions they’re not entitled to. In both cases, tax officials say taxpayers are betting that auditors won’t have the resources to take a deeper look at their accounts.
In response to The Washington Post, a Treasury Department spokesperson called the story “sensational and baseless” but was not allowed to speak on the record regarding the content of the story.
The deadline to file a 2024 tax return is April 15.
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Tags: Income Taxes, IRS, IRS layoffs, tax revenue, Taxes, Trump administration
