The IRS saw a 27% reduction in total staffing between January and December 2025, falling from about 102,000 to 74,000 employees. The latest IRS budget proposal would eliminate another 4,000 positions, bringing IRS staffing to its lowest level in the modern era.

Under the Trump Administration, the IRS has requested just $9.8 billion in discretionary funding for FY 2027, down from the $11.2 billion Congress enacted in FY 2026—a $1.4 billion reduction. Taxpayer services would see a small budget bump (3%), while spending on enforcement and technology & operations support would both be cut dramatically, by 18%.

The IRS estimates that a 4,875-employee staffing reduction “will yield significant savings to the taxpayer, once fully implemented,” amounting to nearly $778 million. The budget proposal would make staffing changes in three areas: taxpayer services, enforcement, and technology & operations support. Combined with cuts made in 2026, enforcement staff would fall by nearly 30% from fiscal 2025 and by 35% from its level in the last full year of the Biden Administration.

Enforcement would absorb essentially all of the staffing cuts, with staffing declining by 4,794 FTE (full time equivalents), or 17%, driven by the largest reductions in examinations and collections—that is, the core functions that enforce tax laws and ensure proper payment and reporting.

Smaller but still significant cuts would apply to Criminal Investigations and regulatory functions. Regulatory work includes developing published IRS guidance materials, interpreting tax laws, providing internal advice to the IRS on general non-tax legal issues, enforcing regulatory rules, laws, and approved business practices, and supporting taxpayers in the areas of pre-filing agreements, determination letters, and advance pricing agreements.

To raise revenue, it’s likely the IRS will lean heavily on its Automated Underreporter (AUR) Program—that’s a long way of saying forms matching. The program compares information returns filed by third parties (such as Forms W-2 and 1099) with amounts reported on individual tax returns. If discrepancies can’t be resolved, the IRS issues proposed notices and assessments. This is, as tax professionals call it, low-hanging fruit. And since the AUR program is largely data-driven and requires less staffing, expect more emphasis on this kind of enforcement activity and less on more resource-intensive work like offshore compliance and........

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