IRS Faces Revenue Drop Amid Trump-Led Staff Cuts

The IRS is anticipating a significant shortfall in tax revenue, expected to exceed $500 billion, representing a more than 10% decline compared to last year. This reduction is largely attributed to President Donald Trump's staff cuts at the IRS, which have resulted in a reduction of approximately 20,000 employees, impacting the agency's ability to enforce tax laws. Consequently, some taxpayers and businesses are exploiting the lack of enforcement by not filing taxes or making unauthorized claims. The Treasury Department has dismissed reports of the projected shortfall as 'sensational and baseless,' though internal IRS officials continue to express concern over the agency's operational capacity. The situation may necessitate increased government borrowing to cover the lost revenue. This potential revenue drop comes amid a backdrop of broader governmental cost-cutting measures led by the Department of Government Efficiency.