DOGE is trying to fire thousands of IRS workers in the middle of tax season. What does it mean for taxpayers? A quick thread on enforcement and customer service. - ThreadSky

vanessawilliamson.bsky.social • 11 days ago

DOGE is trying to fire thousands of IRS workers in the middle of tax season. What does it mean for taxpayers?

A quick thread on enforcement and customer service.

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vanessawilliamson.bsky.social•11 days ago

There will likely be serious damage to tax enforcement, where many new hires have been in recent years. This is a gift to wealthy tax evaders. Most of the $600B in taxes owed but not paid (the “tax gap”) is due to income underreporting by highest earners.

vanessawilliamson.bsky.social•11 days ago

When you underpay and understaff the IRS, they can’t afford to go after the tax evaders with high-priced tax lawyers. Revenue effect is large. An audit of those in the top 10% of earners brings $12 in revenue.

vanessawilliamson.bsky.social•11 days ago

Worse customer service for everyday taxpayers: slower refunds and longer wait times. When the IRS saw a hiring freeze and very serious underfunding in the 2010s, the agency couldn't keep up with taxpayer calls even for the hotline for people facing identity theft.

vanessawilliamson.bsky.social•11 days ago

Bottom line: a substantial roll back of the immense progress the IRS made thanks to the Inflation Reduction Act funding. 6,000 fewer employees is equivalent to about a quarter of the workforce gains in recent years that drastically improved IRS service and made enforcement fairer.

amaliem.bsky.social•11 days ago

So file early? Extend? Don’t file?

vanessawilliamson.bsky.social•11 days ago

Definitely file your returns!! One great option is Direct File --- quick and easy free public tax preparation: https://directfile.irs.gov/

rickmazzoli.bsky.social•11 days ago

for a multitude of reasons the IRS rarely audits or enforces against the Rich and large corporations. It's the little guy they go after - we're easier to take down.
so, and it's counter-intuitive, but this may be good for the little guy, despite now probably having to wait longer for a refund.

vanessawilliamson.bsky.social•11 days ago

The investments in enforcement that are being rolled back were specifically targeted to those earning over $400k a year. Underfunding makes it much harder for the IRS to enforce tax law on the rich. These cuts are a losing proposition for average Americans.

https://www.irs.gov/newsroom/irs-tops-1-billion-in-past-due-taxes-collected-from-millionaires-compliance-efforts-continue-involving-high-wealth-groups-corporations-partnerships

rickmazzoli.bsky.social•11 days ago

i agree w/you 100% ... and the rich have the $$$ to hire a battalion of lawyers to defend.
net net, the Avg american loses. but some will win - marginally. and tax advisors will get more ... (the term i learned was) "aggressive" with deductions - because the risk of audit is less.

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