IRS Tax Enforcement Revenue Fell Last Year As Staffing Cuts Bit— But Early Signs Of Recovery Seen In 2026: Report

Benzinga_recent_news04-16

U.S. tax enforcement activity declined in fiscal year 2025 following staffing cuts at the Internal Revenue Service (IRS), according to government data obtained by Reuters through the Freedom of ...

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The agency also opened more than 120,000 fewer audits compared with the previous year, based on figures from the Taxpayer Advocate Service, the IRS's internal watchdog.\nThe decline follows significant workforce reductions under the administration of Donald Trump, including cuts to enforcement personnel.\nThe agency did not immediately respond to Benzinga‘s request for comment. \nThe Department of Government Efficiency, a cost-cutting initiative previously led by Elon Musk, oversaw reductions across the agency. The IRS enforcement division lost roughly 5,000 employees heading into 2026 and is projected to lose another 5,000.\nAt its peak, the IRS employed about 103,000 workers. The agency now operates with around 75,000 staff and is projected to fall to about 69,000 by 2027.\nMost enforcement revenue comes from unpaid tax balances, while audits often take years to translate into collections.\nTreasury Department officials told Reuters that enforcement revenue rose 12% in the first five months of fiscal 2026, which began Oct. 1.\nAt a Senate Finance Committee hearing on Wednesday, IRS chief Frank Bisignano said the agency is reviewing the \"tax gap,\" or taxes owed but not paid, to determine what portion can be addressed. He said the IRS would return with a plan to reduce the gap using resources and technology.\nSeparately, Bisignano said in an interview on Monday that the agency is delivering a strong tax season despite a smaller workforce.\nThe IRS has processed 120 million tax returns and issued 80 million refunds so far this season, up from 72 million a year earlier. Total refund amounts are up about 11% by value.\nBisignano attributed the gains to technology-driven productivity and operational changes, including updates to call centers and performance metrics. He said enforcement outcomes and customer service have improved.\nThe enforcement data comes as public concern over tax fairness remains elevated. A January survey by the Pew Research Center found that 60% of Americans believe they pay more than their fair share in federal taxes.\nThe survey also showed frustration is higher over wealthy individuals and corporations avoiding taxes than over the amount individuals pay themselves.\nDisclaimer: This content was produced with the help of AI tools and was reviewed and published by Benzinga editors.\nImage via Shutterstock\nTo add Benzinga News as your preferred source on Google, click here.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"isVideo":false,"video":null,"symbols":[],"gpt_button":0,"need_auth":false,"need_login_tip":false,"code":"91000000","status":"200"},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"tenantId":"TBGLOBAL","deviceId":"web-server-community-laohu8-v3","version":"4.42.1","shortVersion":"4.42.1","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2627829102","isCrawlerRequest":true}