The Internal Revenue Service collected $93.8 billion in enforcement revenue during fiscal year 2025, even as the examination and collection workforce that generates that money shrank by roughly 27 percent over the same twelve months. The finding comes from the Treasury Inspector General for Tax Administration, the independent office that reviews IRS operations for Congress. Its August compliance report lays out a year in which the agency collected more total tax revenue than ever before while doing less hands-on enforcement work to get there.
A Record Total Built On A Shrinking Workforce
Examination and collection staffing climbed from 20,098 employees at the close of fiscal 2023 to 27,217 by the end of fiscal 2024, a buildup financed by supplemental money from the Inflation Reduction Act of 2022. That expansion reversed just as fast: staffing dropped to 19,612 employees by the end of fiscal 2025 and to 17,517 as of January 10, 2026, according to the TIGTA compliance trends report. The watchdog traces the decline to workforce reduction efforts that began in 2025, after the IRS had exhausted its remaining Inflation Reduction Act enforcement funding by the end of December.
Enforcement revenue tracked the same curve. The IRS brought in a historic $98.7 billion through examination and collection activity in fiscal 2024, then $93.8 billion in fiscal 2025, a drop even as the agency’s overall tax haul kept climbing. Taxpayers paid $5.3 trillion in total federal tax revenue for the year, the highest figure on record without adjusting for inflation and 13.2 percent more than fiscal 2023, driven largely by a 17 percent jump in individual income tax collections over that same three-year stretch.
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Audits Fell Faster Than The Revenue Did
The staffing cuts hit examinations hardest. Individual audit starts fell 30 percent from fiscal 2024 to fiscal 2025, and audits of taxpayers reporting income above $400,000 fell 27 percent over the same period, according to the same review, filed with the Council of the Inspectors General on Integrity and Efficiency and mirrored on oversight.gov. Revenue directly tied to examinations had jumped 41 percent between fiscal 2023 and fiscal 2024 as the IRS put its expanded workforce to work on higher-income returns; it then fell 35 percent in fiscal 2025 once that workforce started shrinking.
The dollar figures moved with the staffing. Proposed additional taxes from examinations, the extra amount an auditor determines a taxpayer owes after reviewing a return, dropped from $31.9 billion in fiscal 2023 to $26.8 billion in fiscal 2025. The report notes the IRS had shifted its exam focus toward higher-income taxpayers in fiscal 2024, but the broader staffing reductions that followed cut into audit activity across every income group, not just the wealthiest filers.
An Automated Levy Still Runs When The Caseworkers Are Gone
Collection revenue held up better than examination revenue, rising 17 percent between fiscal 2023 and fiscal 2025 largely because the IRS resumed automated collection notices that had been paused on and off during the pandemic. What that means in practice for an older taxpayer with a tax debt is that the notice stream keeps moving even where the staff to work each case in person has not kept pace. One channel illustrates the gap directly: the Federal Payment Levy Program, which lets the IRS take a fixed cut of certain federal payments without an examiner ever opening the file.
Under that program, Social Security old-age and survivors benefits can be levied at a flat 15 percent to satisfy a delinquent tax debt, a process the IRS describes on its own site as running through a computer match between its delinquent-account list and the Bureau of the Fiscal Service’s federal payment records, no caseworker required on the IRS side to trigger it. A recipient gets a final notice, form CP 91 or CP 298, with 30 days to arrange payment before the 15 percent deduction begins; Supplemental Security Income and benefits paid to children are excluded, and low-income recipients below certain federal poverty guidelines are also carved out. The mechanism does not depend on how many examiners or collection employees the IRS has on staff at a given moment, which is exactly why it can keep functioning while the human side of enforcement contracts.
Fewer People On The Other End Of The Phone
What thins out alongside the workforce is the human capacity to resolve a dispute once a notice like a CP 91 arrives, appeal a levy, correct an error, or negotiate a payment plan before an automated deduction starts. A recipient facing that levy keeps the right to appeal before the deduction begins, but working an appeal through to resolution draws on the same examination and collection staff that TIGTA’s own numbers show has become scarcer every quarter. The office cautioned in its report that the downstream consequences of the staffing reductions had not yet fully shown up in the fiscal 2025 data it reviewed. For a retiree relying on Social Security income and facing a first IRS letter, that combination, a levy mechanism that runs on automation and a caseworker pool that keeps shrinking, points toward longer waits for a resolution even as the underlying collection machinery keeps pace.
Tracking A Claim Through A Leaner IRS
A workforce that has shrunk by more than a quarter does not just slow down audits; it also means fewer IRS staff members are available to answer the phone or work an individual case, including a delayed refund. Keeping a clear paper trail becomes the taxpayer’s own job when the examination and collection ranks are this thin, and that record matters most once a refund goes missing months after it was expected.
The IRS Refund Recovery Kit is a 13-page kit with the refund-trace steps (Form 3911) and a refund status tracker spreadsheet for keeping a running record of a claim.
Open the refund-trace steps and tracker spreadsheet inside The IRS Refund Recovery Kit.
This article was researched and drafted with the assistance of AI and reviewed by an editor.
Warren Cohen is a finance writer based in Phoenix, Arizona, covering personal finance topics including credit, banking, and beginner investing. He earned his degree in business administration from Arizona State University and began his career working in consumer finance, where he gained direct experience with lending and credit systems. He now writes for personal finance websites and fintech platforms, focusing on clear, practical content that helps readers make informed financial decisions.
