Fewer Employees, More Enforcement: Welcome to IRS 2.0

Let’s kill the taxpayer fantasy before it goes any further.

The IRS isn't going anywhere.

Everyone is freaking out about a "smaller" IRS. Yes, its workforce is expected to shrink by nearly 30%. But don’t mistake “smaller” for “sleepier.” We've seen a smaller IRS before...in 2018.

And it wasn't sleepy...at all.

➲ Here’s why this matters:

There’s a growing assumption (especially among taxpayers and even a few professionals) that IRS budget cuts mean IRS enforcement is about to disappear.

But the last time the agency operated with around 70,000 employees--2018--they didn’t sit on their hands.

➲ Instead,

• They collected over $40 billion in delinquent accounts.

• They issued more liens and levies than they did in 2023.

• They accepted 24,000 Offers in Compromise.

And they didn’t have the technology they do now.

Here are 5 reasons why fewer IRS employees doesn’t mean fewer tax problems.

1. We’ve Been Here Before. And It Was Busy.

In 2018, the IRS had roughly 73,500 employees. That’s almost identical to where the IRS is projected to land post-cuts.

➲ Here’s what they did with that workforce:

• 14 million accounts in collection

• 639,000+ levies issued

• 410,000+ tax liens filed

If your client had a tax problem in 2018, they did not slip through the cracks.

2. Automation is the New Muscle

The IRS may not need as many employees to collect from taxpayers.

➲ Massive investments are being made in:

• Predictive analytics

• Unified APIs

• Data integration

• Engineering-led modernization

• Building automation into enforcement workflows

They’re getting faster at finding non-compliance--and potentially smarter about targeting it.

3. Less Human Oversight = More Automatic Levies

Fewer humans at the wheel doesn’t mean fewer problems.

The algorithm will continue to send letters that threaten enforcement, and then it will enforce through bank levies and wage garnishments...automatically.

The problem is that while fewer people may mean no less enforcement, it does mean fewer people for taxpayers to speak to about their problems as well as enforcement and less ability to fix errors, pause automated levies, or understand nuance.

4. There’s No Institutional Memory in AI

With so many IRS employees resigning or being fired, a lot of nuance is going out the window, which means more binary decision-making and black-and-white rules.

There won't be anybody to talk through the problem with you. Nobody to make a logical decision based on the circumstances.

The result? Taxpayers need guidance more than ever--especially the ones who don’t know how awful it can get until it’s too late.

5. Tax Debt Isn’t Going Away

Millions of taxpayers still owe. Millions still ignore the problem. And the IRS, for all its changes, will still be collecting.

The agency is gearing up to collect more with less, which makes experienced resolution more important for your clients.

TL;DR -- What You Need to Know

⏩ The IRS workforce is dropping, but employees will still be at 2018 levels (when the IRS was aggressive).

⏩ Fewer employees ≠ fewer collections. Think “automated,” not “sleepy.”

⏩ The agency is getting more data-driven, less personal, and more robotic.

⏩ Institutional knowledge is leaving; discretion is shrinking.

⏩ Tax debt enforcement will be faster and less forgiving.

➤ Have you had clients assume the IRS won’t come after them because of “budget cuts”? What's your response?