The IRS canned 5,000 compliance staff this week, effectively clearing out the new enforcement hires the agency had made with a funding boost from Democrats’ Inflation Reduction Act (IRA).
In fact, the terminations likely result in a net reduction of compliance and enforcement workers at the IRS relative to the IRA boost, since the agency had hired an estimated 4,583 enforcers since the IRA money was deployed, according to a 2024 supplement to the IRA’s strategic operating plan.
“I think our objective is to make sure that the employees that we pay are being productive and effective. And there are many more than 100,000 people working to collect taxes. And not all of them are fully occupied.”
The IRS fails to collect around $700 billion every year in taxes, an amount known as the tax gap that former IRS commissioner Charles Rettig estimated in 2022 could be as large as $1 trillion annually. As a share of 2022 gross domestic product at $26 trillion, that’s 3.8 percent. For comparison, the federal budget deficit in that year was $1.4 trillion.
In total, the IRS on Thursday fired 6,700 employees who were in a probationary trial period with the agency.
— Tobias Burns
