Tax Law Center Blog

Tax professionals may be assessing whether the Department of Government Efficiency (DOGE) under the Trump administration will affect ongoing (and future) IRS audits and investigations.

Recent highly publicized changes suggest a substantial impact. The termination of more than 6,500 IRS employees, the reassignment of IRS Criminal Investigation (CI) agents to immigration enforcement, and dismissals within the Department of Justice raise concerns about the IRS’s ability to manage tax audits and investigations effectively.

The IRS has struggled to overcome staffing shortages for decades, and DOGE’s goal to shave down the federal workforce will crumble its progress. Even worse, the IRS has faced continued challenges in recruitment, hiring, training, and retention. An estimated 63% of the current IRS workforce is eligible to retire within the next six years, according to the latest IRS NTA report to Congress. In addition, further IRS budget cuts are expected later this year, which will further limit enforcement efforts for years to come.  The IRS will become severely strapped for resources.

Government attorneys rely heavily on the investigative support of the IRS to build and prosecute tax cases. If personnel are diverted from tax enforcement or removed from their roles entirely, the ability to pursue tax prosecutions will be significantly constrained due to limited resources.

Despite these constraints, successful audits and investigations generate revenue through tax recoveries and penalties. If enforcement efforts continue to yield substantial financial recoveries, there may be a policy shift to restore some of the lost IRS resources. However, such a reversal is unlikely in the near future.

As these developments continue, tax professionals should closely track how DOGE’s policies influence IRS enforcement, audit procedures, and regulatory oversight. A slow wait-and-see strategy may be advisable for ongoing matters.

While the full extent of DOGE’s impact remains unclear, early indications suggest changes that could benefit noncompliant taxpayers while weakening the government’s enforcement capabilities.