Joe Biden’s proposed IRS army has been dismantled. An astounding $80 billion was granted to the IRS under the Inflation Reduction Act to militarize the tax agency against US citizens who are expected to pay for government mismanagement. The Inflation Reduction Act had hidden provisions to hire tens of thousands of new agents, but the trend has officially reversed.
There were around 102,100 IRS employees when President Donald Trump began his second term in January 2025. During his first six months, the agency declined to 75,700 employees, or a 26% reduction. June 2025 saw a steep decrease of 26,400 workers, as many stayed on through the most recent tax season. Layoffs continued in July, although the exact count has not been published at the time of this writing.
The Oxford Academic published a study in February 2025 that found that the IRS generates $12 in revenue for every dollar it spends on auditing households earning above the 90th percentile. Audits of below-median-income taxpayers yielded $5 in revenue, and this is the demographic most likely to be hunted by the IRS as easy prey. They do not have the same resources and outlets to maximize tax benefits, and study after study has shown that middle America feels the brunt of the tax burden. On average, the study found, $1 spent on audits in general initially raises $2.17 in revenue.
Did people actually believe that the IRS needed 87,000 new employees to target the 600+ billionaires living in America? There is no loose change in taxes, the higher you go up in income. Yet, some politicians believe that the economy will suffer due to the reduction in the tax police.
The US government slashed its IRS annual budget by nearly 20% or $2.5 billion from $12.3 billion for FY2025 to $9.8 billion for FY2026. America has not seen faster or larger budget cuts to the tax authority in modern history. The IRS may be collecting less revenue BUT the people are NOT the problem. The government continues to spend in perpetuity with no end in sight, budgets are a mirage for the public. For you see, the government could NEVER collect enough in tax revenue to cover its spending—plain and simple. Reducing government spending in general is a small step in the right direction.
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Author: Martin Armstrong
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