The Trump presidential administration’s new Department of Government Efficiency reduced the Internal Revenue Service’s (IRS) workforce by about 7,000 positions on February 21, 2025. Federal lawmakers and other observers were troubled by the timing of the force reduction, coming as it does in the middle of tax season, and questions are now flying about how this move could affect income tax filings and returns. In response to this situation, Don Bruce, Boyd Distinguished Professor in the University of Tennessee, Knoxville, Haslam College of Business’ Department of Economics, and director of Haslam’s Boyd Center for Business and Economic Research, recently assessed the motivation behind the abrupt cuts, implications for taxpayers, broader repercussions and more.
Is there a rationale behind firing 7,000 IRS workers in the middle of tax season?
Bruce: The objective appears to be solely to cut the number of federal employees, and this administration is clearly working hard to reduce federal employment. There’s really no other reason to trim staff at the IRS at this point.
Will this action affect taxpayers in the tax season?
Bruce: It absolutely will have an effect. I always emphasize the S in the IRS. They are the Internal Revenue Service. You have trained career professionals whose sole task is to bring money into the federal treasury. They make sure we have the easiest possible time complying with the complicated tax laws – and they call it the tax code for a reason. You have to work on definitions and lots and lots of pages of instructions and that sort of thing, and the service has always been there to help us with that task.
Historically, they’ve been understaffed and underfunded because it’s easy politically to do that. Everybody wants to think of an IRS agent as a bad cop whose job is only to shake you down and accuse you of cheating and find all those hidden dollars that you were lying about. But that’s simply not true.
Most people want to comply with the federal tax law, and the service has been there for generations to help us with that task. They’ve done a really great job, considering the lack of budget, lack of updated modern systems and lack of support internally. I have so much respect for what that agency does.
Does this hurt some taxpayers and benefit others?
Bruce: It’ll hurt those taxpayers who rely on the IRS to guide them through the process, but it may help others who just want to cheat. I can’t imagine that the IRS is going to be able to maintain a consistent degree of enforcement activity with a fraction of their former staff. The sad truth is, the IRS will have even less power to help people and to enforce collection. [Ed’s Note: Recent media reports suggest this is already happening.]
Those who need help are going to have a harder time getting it. That’s a simple fact. If there are fewer workers in the IRS, we’re going to have to wait longer on the phone, try more times, maybe get used to the idea that there’s not going to be somebody answering the phone when we need that help.
What advice would you give to people filing their taxes this year?
Bruce: It’s the same advice I would give any year, and that is to start from the standpoint that we all have a burden to bear here. Start from the standpoint that I want to do my part. We all pay our fair share for public services. Think first about what your money gets you and how important those things are. National defense is an easy place to start, but you go to things like national parks, clean air, clean water and public assistance programs that help our neighbors. There are all kinds of things the federal government does that we value and that our taxes pay for.
The federal government and the private market have done an amazing job in the last couple of decades making it easier for us to pay our taxes. The IRS still has a well-functioning free file system. There are also lots of low-cost and even free options out there in terms of software and in-person accounting services. If you’re worried about getting it wrong, it’s not going to be terribly costly to get help. But it’s important to seek out the help when you need it and recognize that people are going to do their best to help you be compliant.
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CONTACT:
Scott McNutt, business writer/publicist, rmcnutt4@utk.edu
