Since Donald Trump’s return to the White House, deep cuts across federal agencies have included reductions in force, which mean not only layoffs but also elimination of positions altogether. According to CNN , the Department of Government Efficiency (DOGE) proposes cutting the Internal Revenue Service’s (IRS) workforce by 20%. DOGE plans to slash IRS workforce by 20% in cost-cutting move The cuts are expected to take effect mid-May and would impact an estimated 6,800 government agency employees. According to the latest IRS data, the federal tax collector employs roughly 90,000 workers across the United States. In February, roughly 7,000 probationary IRS employees with one year or less of service were laid off from the organization. However, a recent ruling by U.S. District Judge William Alsup requiring federal agencies to reinstate probationary employees terminated under DOGE’s cost-cutting programs could hinder the planned reviews if it isn’t overturned. Trump pushes tax reform to cut federal debt President Trump has promised comprehensive tax reform in the United States, including potentially eliminating the federal income tax and funding the federal government exclusively through tariffs on foreign goods . The Department of Government Efficiency, helmed by businessman Elon Musk, is considering cutting the $36 trillion U.S. national debt by drastically reducing the size of the federal bureaucracy and instituting aggressive cost-cutting measures. It has some unusual proposals, like putting all public spending on a chain to reduce deficits and increase transparency. At the end of February, the Securities and Exchange Commission (SEC) announced cutting its regional office directors to comply with the Trump administration’s cost-saving directives. However, under the reorganization plan, the regional offices, which are spread out across major US cities, would stay open, and the SEC recently submitted its 2025 budget proposal to Congress requesting $2.6 billion. President Trump and Elon Musk have discussed allocating 20% of the savings from DOGE’s cost-cutting measures to Americans through stimulus checks or potential tax credits. Meanwhile, research from accounting automation firm Dancing Numbers suggests that Trump’s proposal to eliminate federal income tax could save the average American approximately $134,809 over their lifetime. Moreover, the firm noted that these lifetime tax savings could extend to as much as $325,561 per person if other wage-based taxes at the state level are also repealed. Critics slam DOGE’s federal job cuts and tax plans Still, not everyone is convinced by DOGE’s cost-cutting tactics, including US Senator Elizabeth Warren, who is highly critical of Elon Musk, Trump, and DOGE. At the beginning of the year, the Massachusetts Senator sent a letter to the DOGE proposing increasing taxes and federal spending. The senator argued that these strategies would make the government more efficient. Alongside the planned layoffs, the Trump administration plans to reassign IRS workers to the Department of Homeland Security to support immigration enforcement. In a February letter, DHS Secretary Kristi Noem requested Treasury Secretary Scott Bessent to temporarily transfer IRS employees to assist with the ongoing immigration crackdown. Cryptopolitan Academy: Tired of market swings? Learn how DeFi can help you build steady passive income. Register Now
