# IRS The **Internal Revenue Service** is the [[Department of the Treasury]] bureau that collects federal taxes and administers the Internal Revenue Code — processing returns, issuing refunds, and conducting audits, collections, and criminal investigation. It collects the overwhelming majority of federal revenue, which makes it the single agency on which the entire fiscal apparatus depends. ## Why the IRS matters to this vault Because **audit capacity is a distributional choice disguised as an administrative one.** Auditing a wage earner is cheap: the return is simple, the income is third-party reported, and the work is largely automated. Auditing a high-net-worth individual or a large partnership is expensive — it takes experienced revenue agents years, against well-resourced counsel. So when enforcement staffing falls, audit coverage does not fall evenly. It falls hardest at the top, because that is where the per-case cost is highest. The agency keeps auditing the people it can afford to audit. This is why the IRS is the archetypal **defunding target** rather than an abolition target. Nobody has to repeal the tax on capital gains if the agency lacks the staff to examine returns that report them. The [[Inflation Reduction Act]]'s enforcement funding — explicitly intended to rebuild capacity against wealthy taxpayers and large corporations — has been a repeated rescission target ever since it passed. ## The 2025–26 contraction The scale is documented rather than estimated. According to the Treasury Inspector General for Tax Administration, between January 2025 and January 2026: | Measure | Change | |---|---| | Employees separated, took deferred resignation, or left via incentive | **31,273** (~30% of the workforce) | | Net staffing change after ~2,000 new hires | **−28%** | | Revenue agents (the people who conduct audits) | **−33%** | | Tax examiners | **−32%** | | Taxpayer Services | **−11,330 employees** | | Information Technology | **−29%** (2,497 employees) | Losses skewed toward both ends of the experience curve: roughly 40% of employees aged 55 or older separated, alongside 43% of those under 25 — which removes institutional memory and the pipeline meant to replace it in the same stroke. TIGTA flagged resulting backlogs in amended returns and taxpayer correspondence. [[DOGE]]-driven cuts and data-access controversies, including proposals to share taxpayer data with immigration enforcement, ran alongside. Note that the enforcement functions were cut *harder than the average* — revenue agents at −33% against a −28% net. That is not what across-the-board austerity looks like. ## Who runs it There is no Senate-confirmed Commissioner. [[Scott Bessent]]'s service as Acting Commissioner under the Federal Vacancies Reform Act expired, and as of a March 2026 IRS statement the agency is led by **[[Frank Bisignano]]** under the title *Chief Executive Officer*, reporting directly to the Treasury Secretary. That title has no basis in the Internal Revenue Code, which contemplates a Commissioner appointed by the President with Senate advice and consent. Running a revenue agency through an office Congress did not create, indefinitely, is itself a data point about the state of the appointments process. ## See Also - [[Department of the Treasury]] · [[FinCEN]] - [[Frank Bisignano]] · [[Scott Bessent]] - [[DOGE]] · [[Inflation Reduction Act]] - [[How Federal Money Moves]] · [[Power of the Purse]] - [[Federal Agencies]]