IRS Auditor Workforce Shrinks by 31% amid Efficiency Cuts, Watchdog Reports

The Internal Revenue Service (IRS) has lost nearly one-third of its tax auditors as part of staffing reductions linked to the Department of Government Efficiency (DOGE), according to a new Treasury watchdog report released May 2.

As of March 2025, the IRS workforce declined by over 11,000 employees—an 11% reduction—largely due to probationary terminations and deferred resignations, the Treasury Inspector General for Tax Administration (TIGTA) reported. The impact was most severe among revenue agents, the IRS employees who conduct audits, with 3,623 separations accounting for a 31% loss in that role alone.

A man putting things in a box | Source: Pexels

The report coincided with President Donald Trump’s fiscal year 2026 budget proposal, which included a $2.5 billion cut to the IRS budget aimed at ending the “weaponization of IRS enforcement.”

Despite the cuts, U.S. Treasury Secretary Scott Bessent defended the reductions during a House Appropriations subcommittee hearing, stating that $2 billion had been trimmed from the IRS’s IT budget “without any operational disruptions.” He emphasized that tax “collections” remain a priority and predicted success through “smarter IT” and “the AI boom” rather than through “unseasoned collections agents.”

A man holding a box | Source: Pexels

Bessent added, “I would expect that collection would continue to be very robust.” As of April 25, the IRS had processed more than 140 million tax returns for the 2025 filing season, slightly exceeding the previous year’s total.

However, critics warn of the potential consequences. In a March letter to former acting IRS Commissioner Melanie Krause, over 130 House Democrats argued the cuts could undermine enforcement against wealthy tax evaders. The lawmakers cited that audits of the top 0.1% of earners returned more than $6 for every $1 invested, based on a 2023 study involving multiple academic institutions and the Treasury.