As a Matter of Tax

Let’s cut to the chase: the IRS is undergoing a significant transformation, and it’s going to impact how you interact with them.

What’s happening within the federal government? It’s a fair question to ask. Prior to 2025, you could at least describe the federal government as stable. Beginning in 2025, the new administration created a department to promote government efficiency, also known as, uh, the Department of Government Efficiency (DOGE).

We all pay taxes and we all have a vested interest in our tax dollars being spent in a prudent manner. So, who wouldn’t be in favor of our tax money going toward a more efficient government?

Well, DOGE’s approach with the IRS has been like showing up for brain surgery with a chainsaw. After just a few days of review, DOGE recommended the federal government sever ties with probationary employees and those deemed non-essential (in the middle of tax season, no less). It further recommended to reduce the IRS’ work force by about half. Experienced revenue agents, collections representatives, and appeals officers all became jobless before you could say “April Fools!”

The government doesn’t want to shut down the IRS. And why should it? It’s extremely profitable – for every fifty cents the government spends, it earns approximately one-hundred dollars from voluntary compliance. Even through enforcement action the government makes a profit – it earns about seven dollars for every dollar it spends attempting to collect from serial non-filers and high-balance taxpayers.

With fewer agents on the job the IRS will increasingly rely on its automation systems to enforce tax compliance. This system automatically identifies non-filers and non-payers, and begins a series of notices that encourage you to file and pay your taxes. The system can file a return for you (this isn’t as good as it sounds, trust me), and begin sending you billing notices. Eventually, the system will start the garnishment process by tapping your bank account to collect unpaid taxes.

So, the IRS plans to keep its doors open and use more automation. I’m not seeing much of a downside to all of this.

Well, it’s going to be extraordinarily difficult to get ahold of anyone, should you need to. Expect wait times to jump exponentially. Specifically, for collections representatives. These are the folks who help the every-day taxpayer with the simple but necessary over-the-phone stuff like setting up payment plans, discussing financial hardship, and seeking penalty abatement. They’re also the ones you want to talk to if you’ve received those letters threatening to garnish your bank account. Since the number of collections representatives has been greatly reduced, I wouldn’t be surprised if it takes several unsuccessful call attempts over a few days before getting through.

Many Appeals Officers were also targets of the DOGE job cuts. Appeals is an independent third party who evaluates each tax matter and decides whether the IRS got it right or got it wrong. The “it” could be any reviewable action the IRS takes, like garnishing a bank account, rejecting a tax settlement offer, filing a lien, or disallowing expenses on an audit. Before the cuts (and due to COVID), Appeals Officers were in short supply. It was not uncommon for a hearing to be scheduled six- to twelve-months out. During COVID it was far worse, and sometimes the hearings were never scheduled. Today, it’s fair to be concerned that the IRS may not be affording the taxpayer due process if these cuts yield a result far worse than what was seen during COVID.

The IRS’ transformation is real, and it’s likely here to stay. If you’re struggling to resolve your tax issue, you should seek the help of a qualified tax professional who knows how to navigate the complex web that now exists within the department.