TaxProf Blog

Wall Street Journal, IRS Retreats From Some Audits as Agency Slashes Workforce:

The Trump administration’s rapid shrinking of the Internal Revenue Service is ending some large audits and putting others in limbo. That is the early fallout of a retreat from stepped-up tax enforcement that could dent compliance and cost the government tens of billions of dollars in revenue.

Treasury Secretary Scott Bessent hasn’t detailed his plans for the IRS, its employees and operations. But a new direction is clear. Tough talk about pursuing tax dodging by corporations and high-income households is gone, and the administration is leaning more on technology for taxpayer service and enforcement. That would reverse the recent IRS push to put more people on telephone lines, in walk-in centers and on the front lines of audits and collections.

The IRS expansion started by former President Joe Biden screeched to a halt after President Trump took office. The new administration fired 7% of IRS employees, mostly from the enforcement staff, and froze hiring. The Republican Congress moved to rescind almost all the enforcement spending Democrats approved in 2022. Former IRS officials expect thousands of further job cuts soon, though the Treasury Department hasn’t announced a specific target.

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Wall Street Journal, IRS Retreats From Some Audits as Agency Slashes Workforce:

The Trump administration’s rapid shrinking of the Internal Revenue Service is ending some large audits and putting others in limbo. That is the early fallout of a retreat from stepped-up tax enforcement that could dent compliance and cost the government tens of billions of dollars in revenue.

Treasury Secretary Scott Bessent hasn’t detailed his plans for the IRS, its employees and operations. But a new direction is clear. Tough talk about pursuing tax dodging by corporations and high-income households is gone, and the administration is leaning more on technology for taxpayer service and enforcement. That would reverse the recent IRS push to put more people on telephone lines, in walk-in centers and on the front lines of audits and collections.

The IRS expansion started by former President Joe Biden screeched to a halt after President Trump took office. The new administration fired 7% of IRS employees, mostly from the enforcement staff, and froze hiring. The Republican Congress moved to rescind almost all the enforcement spending Democrats approved in 2022. Former IRS officials expect thousands of further job cuts soon, though the Treasury Department hasn’t announced a specific target.

(more…)

New York Times, I.R.S. Prepares to Help Find Immigrants Targeted for Deportation:

The tax agency is nearing an agreement to verify whether ICE officials have the right address for people they are trying to deport.

The Internal Revenue Service is preparing to help homeland security officials locate immigrants they are trying to deport, according to three officials familiar with the matter, in a shift toward using protected taxpayer information to help President Trump’s mass deportation push.

Under a draft of an agreement between the I.R.S. and the Immigration and Customs Enforcement, the tax agency would verify whether immigration officials had the right home address for people who have been ordered to leave the United States, according to a copy of the document viewed by The New York Times.

Wall Street Journal, IRS Nears Deal to Share Data for Immigration Enforcement:

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New York Times, I.R.S. Prepares to Help Find Immigrants Targeted for Deportation:

The tax agency is nearing an agreement to verify whether ICE officials have the right address for people they are trying to deport.

The Internal Revenue Service is preparing to help homeland security officials locate immigrants they are trying to deport, according to three officials familiar with the matter, in a shift toward using protected taxpayer information to help President Trump’s mass deportation push.

Under a draft of an agreement between the I.R.S. and the Immigration and Customs Enforcement, the tax agency would verify whether immigration officials had the right home address for people who have been ordered to leave the United States, according to a copy of the document viewed by The New York Times.

Wall Street Journal, IRS Nears Deal to Share Data for Immigration Enforcement:

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