Government officials at the IRS and Treasury Department are bracing for a significant drop in tax revenues this year, according to a report published this weekend by the Washington Post.
The paper cites three unnamed officials in warning that tax receipts could fall by as much as 10%, or $500 billion, if current trends hold through the end of tax season. The officials said the revenue losses are “directly linked to shifting taxpayer behavior and President Donald Trump’s cuts at the IRS.”
The officials, according to the paper, said they are noticing "increased chatter online from people saying they won’t pay taxes this year or will make aggressive claims they aren’t eligible for in a gamble that they won’t be audited." The Treasury Department told the paper the story was “sensational and baseless” and said the anonymous sources “should be dismissed out of hand.”
As ThinkAdvisor has previously reported, the Trump administration is shrinking the federal workforce by ordering agencies to lay off nearly all probationary employees who had not yet gained civil service protection. Thousands of IRS workers will be affected, with the anticipation that the IRS workforce could be halved over the course of the next year.
Democratic lawmakers and independent experts have argued that cutting IRS staffing so significantly would mean less help and longer waits for many U.S. taxpayers and increase the risk that wealthy tax cheats escape paying what they owe.
The president and his supporters, on the other hand, have contended that lower staffing numbers will force the IRS to rethink how it’s structured and how it operates. The administration still wants to collect taxes, they argue, but the huge cuts are an expression of the idea that the IRS needs to change.
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