By Richard Rubin
WASHINGTON -- The Internal Revenue Service will pursue "every bad actor" as it enforces the tax law, even with a smaller staff, agency Chief Executive Officer Frank Bisignano said Wednesday.
Bisignano told the Senate Finance Committee that the agency is improving its ability to detect potential noncompliance by the nation's taxpayers, after repeated questions from lawmakers over whether the agency was pulling back on enforcement.
"Some people think, more agents, more agents," he said during a hearing held on the annual tax-deadline day. "I think, more technology, more technology." He also said the agency wasn't shying away from enforcement of tax laws against high-income people.
"There is no bias to any of it," he said. "This year's numbers will prove itself out."
When President Trump's second term started last year, the IRS had 103,000 employees, following a yearslong ramp-up under the Biden administration. But layoffs and retirement incentives pushed thousands of people out, particularly the revenue agents who audit tax returns.
The agency now has about 70,000 employees, and the Trump administration is proposing further reductions in fiscal 2027. Audits of high-income taxpayers and large partnerships have declined. The administration's own budget says that enforcement spending has a positive return on investment for the government, meaning that shrinking enforcement will increase budget deficits.
The Republican tax law passed last year is set to dole out over $100 billion in additional tax relief this year, both through bigger refunds and smaller tax bills. Americans who are wrapping up their taxes Wednesday are getting new deductions for overtime, tips and being over the age of 65, as well as bigger deductions for state and local taxes. The law also extended tax cuts that had been slated to expire at the end of 2025.
Tax lawyers say that some taxpayers are starting to become more aggressive in cutting corners on their taxes because they are less fearful of IRS enforcement.
Bisignano said the IRS staff was fired up to prevent tax dodging, and he pointed to a 12% increase in enforcement revenue so far this fiscal year. He also highlighted enforcement efforts that don't technically count as audits, such as letters sent to people with suspected underreported income.
Senators, particularly Democrats, pressed Bisignano on the administration's pullback of tax enforcement.
"What is up with the reduction in interest in auditing very rich people and the reduction in actual audits of very rich people?" asked Sen. Sheldon Whitehouse (D., R.I.).
"None of us likes taxes," said Sen. Todd Young (R., Ind.). "I think it's really important that we're enforcing our tax law."
The IRS has estimated that the gross tax gap -- the difference between taxes owed and taxes paid -- was $696 billion in tax year 2022. After enforcement, that shrinks to $606 billion.
IRS officials and lawmakers have been trying for decades to reduce the tax gap. They have said that compliance would increase if the IRS had more information about taxpayers' income sources, more authority to regulate tax preparers and more enforcement staff.
Bisignano said he is reviewing the tax gap and trying to determine what can be addressed.
"What I've seen is nobody's ever worked on the tax gap," he said.
Write to Richard Rubin at richard.rubin@wsj.com
(END) Dow Jones Newswires
April 15, 2026 13:04 ET (17:04 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
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