Key facts
- IRS audit revenue declined by 35% in fiscal year 2025.
- The agency's total enforcement revenue decreased to $93.8 billion in FY25.
- The IRS workforce was reduced by approximately 25% by the end of 2025.
- Revenue agents, responsible for audits, experienced a 31% staff reduction.
- Audits on corporations saw a decrease in recommended additional taxes, while individual taxpayer audits increased.
Tax revenue collected through IRS audits has fallen by 35% in fiscal year 2025, a decline largely attributed to significant workforce reductions implemented during the Trump administration. According to a report from the Treasury Inspector General for Tax Administration (TIGTA), the IRS brought in $93.8 billion through enforcement activities in FY25, down from $98.7 billion the previous year, with the decrease primarily driven by lower audit collections.
The agency's staffing levels have been substantially impacted, with roughly a quarter of its employees lost by the end of 2025. This reduction has particularly affected revenue agents, who perform audits, with 31% of these workers leaving the agency. Experts suggest that losing experienced staff trained to handle complex cases involving wealthy taxpayers and corporations could diminish the government's ability to ensure tax compliance.
While overall audit revenue has decreased, there has been a notable shift in the focus of IRS audits. The agency has increased its scrutiny on individual taxpayers, recommending $11.3 billion in extra income tax in FY25, an increase of $1.8 billion compared to the last full fiscal year under the Biden administration. Conversely, recommended additional taxes from corporate audits have decreased, falling to approximately $12 billion in FY25, a reduction of about $3 billion from the previous year.
These figures reflect a reversal of the budget increases the IRS received in prior years aimed at bolstering enforcement. The Trump administration's strategy involved right-sizing staff and integrating more technology to identify unpaid taxes. The data also indicates that audits remain rare, with only 0.3% of individual tax returns examined in 2021.