The IRS slashed its auditing staff last year — but the move may have backfired as tax collections from enforcement efforts plummeted, an Inspector General report shows.
Page F4From§Eachthe early bird edition — 2 September 2026
IRS enforcement revenue falls after staff cuts, the same week employers limit raises below inflation.
As it ran on the front
Two filings landed on the same news day this week, and I ran them against each other the way you'd run a checkbook against a bank statement. Here's what didn't reconcile.
Filing one: the Inspector General's office confirms that after the IRS slashed its auditing staff last year, tax collections from enforcement plummeted. Not "underperformed." Plummeted. This is not a mystery number. It is the most predictable number in government — you remove the people whose job is to check the math on the biggest returns, and the math on the biggest returns stops getting checked, and the money that was supposed to come in from that checking does not come in. Cause, then effect, then a report confirming the effect, filed in order, on the record. That column moved because somebody moved it.…
…(cont) Filing two, same week: a survey of a thousand employers tells CBS that the raises workers can expect in 2027 will be modest — modest enough, in plain terms, that some workers will come out behind where they started once you subtract inflation. This column also moved, but notice the difference. Nobody slashed a raises department. Nobody signed an order capping what workers take home. This number just — settled, the way a number settles when nobody with the authority to move it is under any pressure to.
That's the whole reconciliation, hon. One ledger falls because an agency chose to stop staffing the people who collect it. The other ledger stalls because nobody with a stake in moving it has to. Both get described in the passive voice by the people who filed them — revenue "plummeted," raises "could leave workers lagging" — as if ledgers do this to themselves. They don't. Somebody staffs the audit floor or doesn't. Somebody sets the raise pool or doesn't.
The uncollected enforcement revenue does not show up as a line item workers ever see. It does not show up as the raise pool, either. It shows up nowhere in this week's filings — which is itself the finding. The government ran an experiment this year in what happens to a number when you stop paying attention to it, and the experiment worked exactly as advertised on the enforcement side. Nobody ran the same experiment on the payroll side, because on the payroll side, no experiment was necessary. The number was already going to sit still.
Two ledgers, filed the same week. Read them side by side and the gap isn't a coincidence you have to squint at. It's an itemized statement of whose column moves when somebody decides it should, and whose column just doesn't have to.
“So the government cuts the guys who check whether rich people's taxes are actually correct, and — shocker — less money comes in, they got a whole Inspector General report confirming it, like a cop admitting he stopped writing tickets and crime went up. Same week, a thousand bosses tell CBS the raise pool ain't keeping up with the grocery bill, and nobody's writing an Inspector General report on that because nobody had to cut a department to make it happen — it just sits there, permanent, like it's weather. The money that walked out of the IRS building didn't end up in anybody's paycheck, buddy, it just walked out. That's not two stories, that's one wallet, empty in two different places the same week.”
“The audit staff reductions were a fiscal responsibility measure, full stop — smaller government, leaner IRS, taxpayer savings across the board. The Inspector General report on lost revenue? That's a modeling exercise, hon, not a real number, you can't spend a projection. As for the raise survey — that's not the government's ledger at all, that's a thousand private businesses making independent decisions in a challenging economic climate, which, did I just call the same climate we're calling strong in the other press release? Let me get back to you on that.”
The receipts
Employers are likely to offer limited salary increases in 2027 amid ongoing economic uncertainty, according to a survey of 1,000 businesses.
This page is a back-issue: the story as it ran, receipts as they were. The current edition is at the front.