The IRS is undergoing a major upheaval as Elon Musk’s Department of Government Efficiency rapidly expands its influence within the agency, with leadership changes and looming staff reductions in the months leading up to the individual income tax filing deadline on Tuesday.
A mass exodus of senior IRS officials is underway, with Chief Information Officer Rajiv Uppaul expected to depart the agency after two years, according to an internal email reviewed by the Washington Examiner on Monday.
In recent weeks, acting IRS Commissioner Melanie Krause announced plans to leave the agency, objecting to a highly contested information-sharing arrangement with the Department of Homeland Security. Her exit is now the third by an IRS chief this year. Chief Privacy Officer Kathleen Walters, Chief Financial Officer Teresa Hunter, and Chief Risk Officer Mike Wetklow are also preparing to depart the agency.
The federal government’s push to expand data-sharing to help officials locate those who have violated criminal immigration laws has triggered alarm within the IRS, which has long held taxpayer confidentiality as a core principle, according to a current and former employee of the agency.
The IRS has long promoted tax compliance among individuals living and working in the U.S. without legal status, offering assurances that their tax information would remain confidential and not be passed to immigration authorities. To file their returns, these individuals use unique taxpayer identification numbers rather than Social Security numbers.
“It’s been absolute chaos here over the last couple months and it’s clear our top leaders feel the Trump administration is crossing a moral line, so we are seeing them leaving in droves,” said an IRS employee speaking on the condition of anonymity for fear of retaliation. “This is not the time for mass changes at the agency during the busiest time for us.”
The Treasury Department has defended it changes as it focuses on the IRS’ outdated technology.
“As we focus on IT modernization and re-organize the agency to better serve the taxpayer, we are also in the midst of breaking down data silos that for too long have stood in the way of identifying waste, fraud, and abuse and bringing criminals to justice. We believe these goals are critical to a more efficient government and safer country,” a Treasury Department spokesperson said in a statement.
Earlier this month, the IRS initiated a round of layoffs that could reduce its workforce by as many as 20,000 employees — nearly a quarter of its total staff. Around 7,000 probationary workers who were let go starting in February were recently ordered reinstated by a federal judge, though it’s uncertain whether they have actually resumed their duties. Reports have indicated the agency may cut as much as half of its roughly 90,000-person workforce in the coming months.
The DOGE cuts align with a Republican promise to reduce audits targeting wealthy Americans. The Biden administration allocated nearly $80 billion in additional funding for the IRS, primarily aimed at recovering unpaid taxes from the wealthy. Republicans condemned the audit initiative, labeling it an attack on middle-class people and small businesses.
This all coincides with the tax filing deadline on Tuesday. IRS revenue agents are sounding the alarm, warning that recent staffing reductions are leaving the agency with diminished capacity to investigate tax evasion by corporations and high-income earners, ultimately reducing government revenue.
“I currently have over two times the amount of work that I used to — so these layoffs are ultimately going to delay collections and audits and our agency is not going to bring in the same amount of revenue,” the IRS employee said. “We’ve also been made aware of errors on the website that show the wrong deadline for extension payments, misidentified tax forms, so it’s just very messy and sloppy ahead of our biggest day.”
On the https://t.co/Wq5JeTE5LR website, the “log in” button was not in the top right on the navbar like it is on most websites. It was weirdly placed in the middle of the page below the fold.
An IRS engineer explained that the *soonest* this change could get deployed is July… pic.twitter.com/9mOgoi0RQ3
— Department of Government Efficiency (@DOGE) April 9, 2025
While officials have not answered questions regarding errors on the IRS website, Elon Musk posted about changes DOGE is making to the IRS website last week.
“This engineer worked with the DOGE team to delete the red tape and accomplished the task in 71 minutes. See before/after pictures below,” Musk wrote. “There are great people at the IRS, who are simply being strangled by bureaucracy.”
Job cuts may impact the IRS’s ability to generate revenue, even as the agency reported taking in over $5.1 trillion during the fiscal 2024. The IRS has been working to address what’s known as the “tax gap”—the shortfall between what taxpayers owe and what is actually paid. Recent data and official statements suggest this annual gap ranges between $600 billion and $1 trillion.
A 2021 study circulated by the National Bureau of Economic Research found that for each dollar the IRS invests in enforcement, it typically recovers between $5 and $12 in revenue.
IRS CHIEF MELANIE KRAUSE RESIGNS AFTER AGENCY AGREES TO HAND OVER IMMIGRANTS’ DATA TO ICE
The Treasury Department is already forecasting a drop of at least 10% in tax revenue collected by the IRS this spring due to the recent cuts, according to the Washington Post. That shortfall amounts to over $500 billion—surpassing the yearly budgets of most federal agencies.