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The Trump administration is drafting plans to significantly reduce the Internal Revenue Service workforce by as much as 50% through a combination of layoffs, natural attrition, and incentivized buyouts.

This dramatic downsizing effort, part of a broader initiative to shrink the federal government, would transform an agency that currently employs approximately 90,000 workers nationwide. The administration hopes to achieve the reductions by the end of the year, the source said.

These steep cuts are expected to end its growing progress to improve customer service, modernize, and catch taxpayers not paying what they owe. 

Without the beefed-up workforce thanks to the tens of billions of extra funding from the 2022 tax-and-climate law known as the Inflation Reduction Act, audits will likely take longer and phone wait times will go back up.

“These Layoffs Would Add Hundreds Of Billions or More
To Deficits And Encourage Tax Cheating, Tilting The Tax
System Further Toward The Wealthy and Business
Interests at The Expense of Everyday Americans” 
Lily Batchelder, former assistant treasury secretary for tax policy and
professor at NYU Law, said in a statement.

A reduction in force of tens of thousands of employees would render the IRS “dysfunctional,”
said John Koskinen, a former IRS commissioner.

The IRS employs roughly 90,000 workers and people of color make up 56% of the IRS workforce, with women representing 65%.

The reduction goal includes:

• IRS employees who have already left or were fired, which is about 12,000 employees. 
• Between 4% and 5% of the IRS’s workforce took the offer from Trump adviser Elon Musk to resign and be paid until Sept. 30, the leader of the agency’s union said earlier Tuesday. and
• About 7,400 probationary employees at the agency have been fired.

More than half of the IRS workforce is eligible to retire within six years, according to National Taxpayer Advocate Erin Collins in a report earlier this year. Actually, the most recent strategic operating plan, states that 63% of the current IRS workforce is eligible to retire within six years.

 Have an IRS Tax Problem?

     Contact the Tax Lawyers at

Marini & Associates, P.A. 

for a FREE Tax HELP Contact us at:
www.TaxAid.com or www.OVDPLaw.com
or Toll Free at 888 8TAXAID (888-882-9243)

Sources

The New York Times

The Associated Press

Bloomberg Law

Read more at: Tax Times blog

On March 3, 2025 we posted BOI Was Back But Treasury Now Says That It's Off Again - Is This Any Way to Run a Country? where we discussed that the Department declared that it would suspend enforcement of the CTA and the associated Beneficial Ownership Information (BOI) reporting requirements for domestic companies and U.S. citizens. This shift represents a major departure from the original intent of the law, which was designed to combat illicit financial activities through increased transparency of both domestic and foreign entities.

Key Developments

1. Enforcement Pause: The Treasury Department will not enforce CTA reporting requirements against U.S. citizens, domestic entities, and their beneficial owners.
2. Scope Reduction: Treasury intends to issue a proposed rule limiting the CTA's application to foreign reporting companies only.
3. Deadline Extension: FinCEN previously announced a revision of beneficial ownership information reporting deadlines, with a new deadline to be set in an upcoming interim final rule.

Support for the Change:

• Treasury Secretary Scott Bessent views this as a "victory for common sense" aligning with efforts to reduce regulatory burdens on small businesses.
• The Cato Institute's Brent Skorup suggests Treasury may rely on statutory discretion to exempt most small businesses and nonprofits.

Criticism and Concerns:

• Transparency advocates argue this change could make the U.S. a haven for illicit financial activity and may violate global anti-money laundering standards.
  • See our post US Is World's Best Tax Haven & Location For Hiding Income. 
• Some legal experts, like Chye-Ching Huang of the Tax Law Center, contend that Treasury lacks the authority to not enforce a law enacted by Congress.
• Critics, including Senator Ron Wyden, view this as potentially benefiting entities seeking to hide illicit activities.
  • See our post US Is World's Best Tax Haven & Location For Hiding Income. 

Ongoing Uncertainties

1. Legal Status: The CTA remains in effect, despite Treasury's non-enforcement stance, creating potential risks for non-compliant entities.
2. Information Clarity: There are concerns about the consistency and accessibility of information regarding these changes, with announcements coming from different sources within Treasury.
3. Future Developments: The situation remains fluid, with potential for further legal challenges, congressional action, or additional regulatory changes.

This shift in CTA enforcement represents a significant policy change with wide-ranging implications for corporate transparency and anti-money laundering efforts in the United States.

Need Help Filing Your BOI Report?

 

     Contact the Tax Lawyers at

Marini & Associates, P.A. 

 

 

 

for a FREE Tax HELP Contact us at:
www.TaxAid.com or www.OVDPLaw.com
or Toll Free at 888 8TAXAID (888-882-9243)

 

 

 

 

 

 

 

Read more at: Tax Times blog

On February 20, 2025 we posted BOI is Back With a New March 21, 2025 Deadline! where we discussed that with the February 18, 2025, decision by the U.S. District Court for the Eastern District of Texas in Smith, et al. v. U.S. Department of the Treasury, et al., 6:24-cv-00336 (E.D. Tex.), beneficial ownership information (BOI) reporting requirements under the Corporate Transparency Act (CTA) are once again back in effect.

Now on March 2, 2025, the U.S. Treasury Department announced a significant change regarding the enforcement of the Corporate Transparency Act (CTA). 

The Department Declared That It Would Suspend
Enforcement Of The CTA And The Associated
Beneficial Ownership Information (BOI) Reporting Requirements For Domestic Companies And U.S. Citizens.

Key points of this announcement include:

• Suspension of penalties: The Treasury will not issue fines, penalties, or take enforcement actions against companies that fail to file or update BOI reports under the current deadlines.

• Narrowing scope: The Treasury is preparing a proposed rulemaking to limit the CTA's application to foreign reporting companies only.

• Upcoming rule changes: By March 21, 2025, the Financial Crimes Enforcement Network (FinCEN) intends to issue an interim final rule extending BOI reporting deadlines.

• Public comment: FinCEN plans to solicit public input on potential revisions to existing BOI reporting requirements.

This decision effectively pauses the CTA's implementation for domestic entities, which was originally designed to combat money laundering, terrorist financing, and other illicit activities. The move has been welcomed by some as reducing regulatory burdens on businesses, particularly small enterprises. 

“This is a victory for common sense,” said U.S. Secretary of the Treasury Scott Bessent.  “Today’s action is part of President Trump’s bold agenda to unleash American prosperity by reining in burdensome regulations, in particular for small businesses that are the backbone of the American economy.”

However, critics argue that this change could potentially weaken efforts to combat financial crimes and maintain corporate transparency.

It's important to note that while the enforcement is suspended, the Treasury Department is working on new regulations that will likely bring significant changes to the existing reporting regime.  

Need Help Filing Your BOI Report?

     Contact the Tax Lawyers at

Marini & Associates, P.A. 

Read more at: Tax Times blog

 On July 16, 2020 we posted IRS Identifies Debt Resolution Companies as Scams on 2020 Dirty Dozen List!, where we discussed that the IRS 2020 "Dirty Dozen" list of tax scams for 2020 included Offer in Compromise Mills and advises Americans to be vigilant to these threats.

Now five years later in IR-2025-26, the IRS 2025 "Dirty Dozen" list of tax scams STILL includes Offer in Compromise Mills!

The Agency's Rejection Rate is Roughly 67% .

Individual taxpayers can use the free online Offer in Compromise Pre-Qualifier tool to see if they qualify. The simple tool allows taxpayers to confirm eligibility and provides an estimated offer amount. 

Taxpayers can apply for an OIC without third-party representation; but the IRS reminds taxpayers that if they need help, they should be cautious about whom they hire.

Have a Real Tax Problem?

Contact REAL Tax Attorneys!

at Marini & Associates, P.A.   

for a FREE Tax Consultation contact us at:

www.TaxAid.com or www.OVDPLaw.com or

Toll Free at 888-8TaxAid (888) 882-9243

Read more at: Tax Times blog