The IRS Shrank. Will That Lead to More Tax Cheating?

The IRS has lost 30,000 employees since Biden's term ended, leading to a sharp decline in audits—especially of high-income individuals and complex financial entities—amid a stated administration goal of shrinking government. Despite evidence that enforcement brings in $80 billion annually and strengthens compliance norms, the 2027 budget proposes cutting nearly 2,000 more staff, acknowledging this will reduce federal revenue. Experts and tax lawyers report a growing perception that cheating is easier, likening the pullback to 'defunding the police.'

Understand how political shifts in IRS enforcement capacity are weakening tax compliance norms and could reshape who pays and how much.

1. 01IRS headcount has dropped to 70,000—30,000 fewer than under Biden—with audits of high-income earners and complex firms declining sharply.
2. 02The Trump administration's 2027 budget admits that cutting IRS enforcement will cost $643 billion in lost revenue, despite projecting $46 billion in spending reductions.
3. 03Tax lawyers report a rising mindset among clients that 'the IRS won't catch me,' threatening the norm of broad tax compliance.