Targeting the IRS Shows DOGE’s Stated Purpose Is Just a Pretext

The Trump administration’s firings of federal workers in many other agencies may have gotten more headlines, but its targeting of the IRS is uniquely revealing. Elon Musk claims he wants his Department of Government Efficiency initiative to prevent the US from going bankrupt and to root out fraud.

Yet DOGE is going after an agency whose very purpose is to collect revenue and catch tax cheaters. Congress must not let the administration severely impair the IRS’s ability to do that essential job.

The administration has already fired over 7,000 IRS employees and reportedly plans to cut the agency workforce by up to half. Gutting the IRS will do exactly the opposite of DOGE’s stated goals. Research shows that every dollar spent on IRS tax enforcement raises multiple dollars in revenue, so every dollar cut from IRS enforcement loses more than a dollar of revenue. The depth of the cuts under consideration could reduce revenue even more by undermining voluntary compliance.

While the administration’s real goal is unclear, there’s no question that these changes hurt honest taxpayers. Cutting the IRS reduces the revenue needed to pay for services they count on and undermines trust in government. It will likely make it harder for taxpayers to get their questions answered, file their returns, or access their refunds. And it may threaten the privacy of their confidential financial information.

The administration’s vendetta against the IRS isn’t a complete surprise. In the 1990s, some congressional Republicans began comparing the IRS to “jack-booted thugs” and called for abolishing the agency. After Republicans took control of the House in the 2010 elections, they launched a years-long effort to cut IRS funding. Between 2010 and 2018, the IRS enforcement workforce was cut by about 30%, the number of auditors of sophisticated tax returns fell to 1950s levels, and the audit rate of millionaires plummeted by 80%.

The damage was severe. The depleted and outgunned IRS, laboring with computer systems dating back to the Kennedy administration, was in no position to fulfill its mission. Each year, about half a trillion dollars of taxes legally owed went unpaid.

Finally, in the 2022 Inflation Reduction Act, Congress enacted $80 billion in long-term funding to rebuild and modernize the IRS. The added funding has already started paying off in improved customer service and a crackdown on wealthy tax cheats.

But this progress is now at grave risk, with the White House continuing a congressional Republican effort to claw back IRS funding (nearly $40 billion has already been rescinded or frozen via the appropriations process) and DOGE targeting thousands of IRS workers.

The focus of the firings also seems disturbingly specific. Many apparently occurred in the Small Business and Self-Employed Division, which covers businesses with assets up to $10 million and plays a critical role in collecting revenue and fighting fraud.

Most people’s income is from their wages and salaries—income for which the IRS has W-2 information—so tax compliance is extremely high there. There’s no W-2 equivalent for small businesses and self-employed taxpayers, so tax compliance among these filers is much lower.

The Trump administration also is reportedly firing personnel in the Large Business and International Division, which audits the wealthiest taxpayers—another fiscally irresponsible, pro-fraud move.

Further, the administration announced plans to close IRS offices, including taxpayer assistance centers, around the country. When this happens, taxpayers will get less help with addressing their tax questions and filing their returns.

DOGE’s actions also pose major risks to taxpayers’ privacy rights. After seeking access to detailed information on Treasury Department payment systems and tax return information, the initiative is reportedly pushing the IRS to share taxpayer information—which is subject to strict confidentiality laws—with other federal agencies.

This may be illegal, and it would increase the possibility of large-scale data breaches, illicit use of taxpayer data for political ends, and mishandling of data or other errors that lead to loss of federal benefits.

The damage from the administration’s other mass firings and pro-fraud moves—such as dismantling the Consumer Financial Protection Bureau—is at odds with DOGE’s stated goals, too. But the targeting of the IRS, with its revenue raising, anti-fraud mission, gives the DOGE game away. And sadly, it’s not a game.

Congress needs to stand up for honest taxpayers and use its power to resist the Trump administration’s efforts to decimate the IRS. Lawmakers must safeguard fiscal responsibility and combat tax cheating—not the reverse.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.

Author Information

Chuck Marr is vice president for federal tax policy at the Center on Budget and Policy Priorities, a Washington, D.C. think tank that promotes federal and state policies to reduce poverty and inequality.

Write for Us: Author Guidelines