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According to an anonymous report from The Washington Post, insiders project that the federal government’s revenue will decline by nearly 10% in the upcoming year due to the massive trimming of the Internal Revenue Service (IRS). Treasury Department and IRS officials, speaking under the condition of anonymity, anticipate a loss of up to $500 billion in revenue compared to the 2024 projections, which amounts to nearly two-thirds of the annual defense budget.
Natasha Sarin, the president of the Yale Budget Lab and a former senior tax official in the Biden administration, expressed her astonishment to The Washington Post, stating, “The idea of doing that in one year, it’s hard to grapple with how meaningful of a shift that represents.”
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He’s pulling the mask off,… pic.twitter.com/GEG0jmtlQO
— Overton (@overton_news) March 21, 2025
Earlier this week, reports surfaced that the Trump administration, acting on the advice of Elon Musk’s Department of Government Efficiency, planned to lay off more than 20,000 IRS workers, aiming to reduce the agency’s current staff by nearly 20% by mid-May.
Observers are concerned that many individuals and businesses may choose to skip their annual filings or forgo paying outstanding balances as public attitudes toward the IRS shift. The firings have also forced the IRS to cancel several large audits, with some recent hires expressing that their initial motivation to collect taxes from major companies has dissipated.
BREAKING: IRS to lay off up to 15,000 employees as Trump slashes government waste – NYP pic.twitter.com/su99WRz6k4
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“The thing that I think is really alarming is if this data ends up telling a story about how this filing season is evolving, and you’re seeing it happen in real time,” Sarin said. The IRS has reportedly noticed an increase in online discussions among individuals openly planning to exploit skeptical tax exemptions or neglect paying federal taxes altogether.
The report stated that while natural disasters like the Los Angeles fires and individual economic hardships could delay some filings, these factors would not account for the projected 10% drop in revenue. If the federal government loses half a trillion dollars in tax revenue, it will only add to the already staggering national debt of $36.2 trillion.
In January, Trump signed a “cease and desist” order for the IRS, which the administration dubbed “a crucial first step to helping middle-class Americans” overcome the fear caused by the Biden administration’s hiring of 87,000 new IRS agents.
