IRS Workforce Reduction: Impact on Tax Audits and International Business

The IRS is facing a potential workforce reduction due to buyouts and resignations. This could significantly impact the agency's ability to conduct tax audits. The agency grew to over 102,000 workers in 2024 and could shrink considerably if buyout offers are accepted.

Approximately 12,000 IRS staff have already resigned or been laid off since January. Those who accept buyouts will go on paid leave through the end of the fiscal year, September 30. The Treasury Department claims the employee numbers leaving are similar to those added under President Biden, but this claim requires further verification.

The White House initially anticipated around 10% of eligible workers would accept resignation offers. This reduction could lead to delays in tax audits and impact international businesses. The Treasury Department states that the roll back of wasteful Biden-era hiring surges, and consolidation of critical support functions are vital to improve both efficiency and quality of service.