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Trump Gutted the IRS. Now Congress Has to Fix It. [1]
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Date: 2025-05-02
During my time in Congress, I learned quickly that no federal agency absorbs more public frustration than the IRS. But often, that frustration isn’t about what the IRS does — it’s about what it hasn’t been given: the tools and support to function effectively. And under the Trump administration, those tools have been aggressively taken away.
The damage the IRS has faced has been deep and dangerous. Budget cuts and staff reductions pushed by Trump and his allies have hollowed out the agency’s ability to enforce tax laws fairly and efficiently. The results are already showing — weakened oversight, rising noncompliance, and a growing perception that the tax system works better for the wealthy than for everyone else.
According to the New York Times, the Trump administration laid off 7,000 IRS employees, and another 22,000 have taken buyouts. That means the IRS workforce could soon be half the size it was just a few years ago. And the technology powering our tax system? It dates back to the 1960s and, according to the Government Accountability Office, won’t be fully modernized until 2030.
With fewer staff and outdated infrastructure, the IRS is now forced into impossible tradeoffs — deciding what to enforce and what to let slide. That’s a recipe for inequity.
Take, for example, how the IRS handles audits. Taxpayers earning less than $25,000 a year are audited at five times the rate of other income groups, largely because they claim the Earned Income Tax Credit (EITC). These audits are labor-intensive and bring in little revenue — just $3,600 per case on average — yet they make up nearly 40% of all individual audits. Meanwhile, audits of wealthy taxpayers and large corporations, which produce far greater returns, have plummeted.
This is not only inefficient — it’s unjust. If Congress is serious about closing the tax gap and restoring public confidence in the tax system, it should instruct the IRS to focus its limited resources on high-income earners and large corporations, where the potential for abuse is greatest, and the potential for revenue returns are highest.
According to the Tax Policy Center, more than 7% of taxpayers with incomes over $1 million were audited in 2011. By 2018, that number had dropped to just 1.6%. For corporations with over $20 billion in assets, audit rates fell from over 84% to 57%. This is where enforcement is most needed — and most lacking.
At the same time agency enforcement has declines, the IRS’ resources have been stretched by new programs like Direct File — a pilot initiative allowing taxpayers to file returns directly with the IRS. In theory, it’s a promising idea. In practice, it’s not ready for prime time.
A March 2025 report from the agency’s inspector general found that the system was difficult to use and failed to include basic features — like the ability to claim the education tax credit. Some users lost out on nearly $1,000 in deductions. The program cost more than $60 million to serve 2.3 million users, and costs are expected to rise.
This isn’t about resisting innovation — it’s about knowing when an agency is being asked to do too much, with too little. A platform like Direct File requires world-class design and absolute accuracy — capabilities the IRS simply doesn’t have under its current constraints.
The truth is, the IRS isn’t the villain in this story. It’s the casualty. The real damage came from years of deliberate underfunding and political scapegoating. Now the agency is being asked to do more with less, and to make high-stakes decisions that will shape tax enforcement for years to come.
It’s time for Congress to step in — not just to restore funding, but to help the agency set clear priorities.
That starts with ending low-yield audits that disproportionately target low-income taxpayers. It means focusing enforcement on the highest earners, where the revenue returns — and fairness arguments — are strongest. And it means pausing new initiatives until the IRS has the infrastructure to implement them responsibly.
The IRS isn’t asking for praise. It’s asking for the resources to do its job — and to do it fairly. Congress should give it what it needs.
Stephanie Murphy served as the U.S. representative for Florida's 7th congressional district from 2017 to 2023. She was a member of the U.S. House Ways and Means Committee, which oversees the Internal Revenue Service
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