IRS Audit Revenue Drops 35 Percent After Staffing Cuts

A report from the Treasury Inspector General for Tax Administration reveals that Internal Revenue Service audit revenue fell 35 percent in fiscal year 2025, dropping from $10 billion to $6.5 billion. This decline follows a push by President Donald Trump to reduce the federal workforce at the start of his second term, which resulted in the agency losing approximately 30 percent of its audit-dedicated staff.

The staffing shortage led to a 30 percent decrease in audits of individuals and forced one major agency division to halt new audits for six months. While overall tax revenue reached a record $5.3 trillion due to automatic withholdings, the agency continues to estimate that $700 billion in taxes goes unpaid annually.

Trump administration officials suggest that artificial intelligence may eventually offset staffing losses by increasing efficiency. IRS CEO Frank Bisignano has dismissed concerns regarding the workforce reductions.