Post Reports
The IRS is in turmoil. Taxpayers are taking notice.
Mar 26, 2025
In this enlightening discussion, Jacob Bogage, Congressional economics correspondent for The Washington Post, delves into the tumultuous state of the IRS as Tax Day approaches. He reveals a staggering predicted shortfall of over $500 billion in tax receipts and explores how the Trump administration’s policies have reshaped taxpayer behavior and agency effectiveness. The conversation also touches on a controversial proposal that would allow the IRS to share taxpayer information with ICE, raising critical concerns about privacy and the implications for undocumented immigrants.
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Quick takeaways
- A predicted 10% decrease in tax revenue, amounting to over $500 billion, is driven by Trump administration policies impacting IRS operations.
- The reduction in IRS enforcement has shifted taxpayer behavior, leading to a rise in underreported earnings and exaggerated deductions.
Deep dives
Projected Tax Revenue Decline
An anticipated 10% decrease in tax revenue for the current filing season could result in a staggering loss of $500 billion for the federal government. This decrease is linked to significant changes implemented by the Trump administration, particularly through the Department of Government Efficiency, or DOGE, which has led to mass layoffs at the IRS and halted modernization efforts. These actions have undermined the IRS's ability to effectively collect taxes and enforce compliance, raising concerns among tax officials regarding the resilience of the voluntary tax system in America. As a result, both taxpayers and corporations are reportedly adjusting their behaviors to capitalize on reduced enforcement and oversight.
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