The Future of the IRS in the Age of DOGE
Steve Perry- In early 2025, the IRS laid off 7,000 employees (about 8% of its workforce) amid federal cost-cutting, with potential further cuts looming. - Concerns arise about delayed refunds, reduced customer service, and weaker tax enforcement due to fewer agents. - Audits may decline, increasing the risk of tax evasion, while the IRS plans to rely more on automation, AI, and data analytics for audit selection and enforcement. - Transitioning to AI-driven systems will be slow given the IRS’s outdated infrastructure, requiring major upgrades and fundamental changes. - Digital self-service tools and specialized hiring are expected to expand as part of the IRS’s new strategy. - Privacy and data security issues related to AI could erode public trust, challenging voluntary tax compliance. - Taxpayers will need experienced professionals like Steve Perry, EA, for effective representation and navigating complex rules, especially in areas like crypto taxation. - The IRS’s evolving enforcement approach signals a shift in how taxpayers negotiate and comply with tax laws going forward.