Trump administration IRS agent cuts caused $3.5B audit revenue drop

The Trump administration has reduced the federal workforce to the lowest point in roughly 60 years, according to newly released data from the Bureau of Labor Statistics.

As of August, just 2.67 million people were employed by the federal government, down from just over 3 million when President Donald Trump took office, marking the lowest headcount since 1966, per the BLS.

The administration has estimated those cuts will produce significant savings, with OPM projecting that its Deferred Resignation Program alone will save more than $20 billion a year. But the reductions have also come with costs.

Revenue collected from IRS examinations fell 35%, from about $10 billion in fiscal 2024 to $6.5 billion in fiscal 2025, as the agency was undergoing steep workforce reductions that ultimately cut examination and collection staffing by nearly 10,000 employees, according to a Treasury watchdog.

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Former President Joe Biden secured nearly $80 billion in 2022 for the IRS over 10 years to upgrade its systems, improve taxpayer service and hire more staff, including enforcement personnel.

The Trump administration has proposed further IRS cuts for 2027.

Not all agencies have been hit the same by the Trump administration’s cuts.

The Departments of Education, Agriculture and Housing and Urban Development have been cut particularly hard, whereas headcount at the Department of Homeland Security, which has been responsible for carrying out much of the president’s immigration agenda, has remained largely unchanged.

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Not included in the BLS’ count of government employees are the roughly 1.35 million members of the armed services or the approximately 100,000 people employed by intelligence agencies.

Cutting the size of the federal workforce, a project that was eventually spearheaded by the Department of Government Efficiency and the Office of Personnel Management, was a major campaign promise during Trump’s 2024 run as he vowed to slim down what he said was a bloated government. 

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GAO found that agencies spent about $6.7 billion paying employees who took part in the Deferred Resignation Program, which allowed many of them to stop working while still collecting a paycheck until they officially left government. The Partnership for Public Service also estimated the government spent $12.1 million rehiring workers who had previously been fired during the administration’s workforce reductions.

Despite the cuts, most of which happened during the president’s first year in office, the Trump administration spent 3% more on federal salaries during its first year in power than the Biden administration did during its initial year.

If Republicans win the midterm elections, the president has promised to cut $5,000 checks to all adult American citizens, a long-shot promise that, if followed through on, would cost the nation between $1.2 trillion and $1.35 trillion.

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The White House did not respond to a request for comment when reached by Fox News Digital.