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Top officials at the Internal Revenue Service are predicting a large drop in tax revenue this year due to individuals and businesses either not filing or not paying all due taxes, IRS sources told The Washington Post.
According to internal projections, the IRS could lose 10 percent of its revenue, or $500 billion, for tax year 2024.
Thanks to Donald Trump and Elon Musk‘s cuts via the so-called Department of Government Efficiency, the IRS will have fewer employees and therefore less ability to enforce the tax code. Because of the perception that the IRS will be less likely to prosecute tax cheats, the agency has “noticed an uptick of online chatter from individuals declaring their intention to not pay taxes this year,” The Post reported after speaking to three individuals familiar with tax projections. They also said that before Trump was sworn in, the incoming administration was warned that this could happen.
“The idea of doing that in one year, it’s hard to grapple with how meaningful of a shift that represents,” Natasha Sarin, a former Biden administration senior tax official and president of the Yale Budget Lab, told the paper.
So far this tax season, the IRS is seeing 1.7 percent fewer returns than it did by this time last year. But internal projections take into account outstanding balances compared to last year as well as payments on returns that have already been filed this year.
Sarin said the data is concerning. “The thing that I think is really alarming is if this data ends up telling a story about how this filing season is evolving, and you’re seeing it happen in real time,” she said.
A Treasury Department spokesperson who requested anonymity told The Post that the claims are “sensational and baseless” and “should be dismissed out of hand.”
Before the changes at the IRS, projections were higher for this tax season than last year, considering that the economy grew 2.8 percent in 2024.
