The Internal Revenue Service (IRS) has suspended operational overhauls launched during the Biden administration and plans to make changes to the workforce, the Treasury Secretary said in a call with a reporter on Friday.
Treasury officials said U.S. tax collection agencies have the opportunity to put in a strategic suspension on modernization efforts.
Officials have made an indirect swipe with the first $80 billion extra fund given to the IRS under the Democrats' Inflation Reduction Act of 2022 (IRA), saying large investments often have small results.
The suspension announcement follows reports on Thursday in multiple media outlets, with the IRS saying it will maximize 20% of its workforce in an agency inquiry by so-called government efficiency (DOGE).
Washington Post It has been reported On Thursday, Doge officials told the deputy IRS chief to remove more than 18,000 jobs.
Finance officials said Friday that they didn't have a specific number in mind as to the amount of IRS jobs they want to cut, but that agents would have the opportunity to restructure their workforce.
The IRS announced earlier this year that it would remove nearly 7,000 court employees.
The finance authorities also said the direct file program was being reviewed, launched during the Biden administration, an online portal that allows taxpayers to file taxes directly with the IRS. Treasury Secretary Scott Bessent said the program will be available during the 2025 tax season.
multiple Outlet Also on Thursday, IRS Commissioner William Paul, an employee of the career agency, reported that he will be replaced by Andrew De Mello, who was appointed as an inspector for the Department of Education during Trump's first term.
The finance authorities declined to comment on these reports regarding Friday's calls with reporters.
Since its first announcement in 2022, Republicans have been firing for funds to allow for an IRS overhaul. When Republicans controlled the House in 2023, the first law they passed was the withdrawal of the IRS fund.
During the fundraising battles spanning 2023 and 2024, Republicans were able to reclaim 20% to the IRS' first $80 billion increase in fundraising, allowing them to freeze most of the remaining funds due to increased audits and additional taxation.
As of last September, the IRS had spent the remaining $60 billion in Inflation Reduction Act (IRA) funds available to government agencies, the Department of Finance General Administration for Tax Enforcement said in a report released Friday.
The largest spending was $3.7 billion on employee compensation, the TIGTA report concluded.
The finance authorities said Friday it was also reviewing its enforcement practices in the IRS.
Each year, the IRS cannot collect the approximately $700 billion in taxes paid to the government. This is known as the tax gap. Former IRS Commissioner Charles Lettig told Congress in 2022 that the gap was a huge $1 trillion, measuring nearly 4% of the US gross domestic product last year.
