Defunding the IRS is nothing but an effort to reduce tax enforcement. People that have relatively straightforward finances can be trivially audited in a formulaic way with data that's on hand - a lack of human auditing resources tends to benefit those with more complex finances which also tend to be the people with a lot of money who can afford to lobby for less enforcement funding.

Also for reference, in 2024 the IRS had a rate of return of 415:1, they'll obviously target the lowest hanging fruit first but for every dollar of funding received they collected 415 dollars of tax revenue that would have been missed. This is an obscenely efficient organization.

Implied in your statement - it benefits those who can create more complex financial situations. Often the complexity of the situation is largely synthetic.

I agree that the complex financials are generally intentionally created for sheltering and that complexity is only possible because of our overly complex tax code which has been made significantly more complex by tax preparer lobbyists from Intuit and others.

The reflex when people hear "complex" in this era: "Can we use AI for it?".

Next month's headline: "IRS signs 200-million dollar deal with Grok to use AI to analyse tax returns, determine who gets audited".

You’re thinking too far behind. They can just use the AI to generate what your taxes would’ve been.

Just have a script with “what are the taxes owed by $name” and print the output

I’ll take $5M now and you can own 50% of my startup: GenTaxAI

In both cases though, mostly rich people.

Is that 415:1 the rate of return of an audit, or the expense:revenue ratio of the IRS as a whole? I remember hearing some time ago that the expense ratio was 11% for the IRS? But 415:1 is way way less than 11%.

They could also simplify tax law and they wouldn't need so much enforcement. There shouldn't be 5000 types of taxes spread all over the place.

Get rid of sales tax, property tax, exemptions, IRAs, 401ks, short capital gains, long capital gains, medicare, state, all of that bullcrap. Annualized, non-annualized, credits for having an EV on the 4th day of the second Tuesday while being a fisherman, married and single filing differences, end all of that.

Just have one income tax. It should be the sigmoid of your income normalized to the median income in your zip code, then scale it so that the total of everyone's taxes added up makes up for all the other types of tax that we're getting rid of.

The IRS should then distribute whatever is needed to the states. The states are part of the country, their hierarchy is not my problem; give me one number to pay. My tax return should be no bigger than a postcard.

Done.

> Get rid of sales tax, property tax, exemptions, IRAs, 401ks, short capital gains, long capital gains, medicare, state, all of that bullcrap. Annualized, non-annualized, credits for having an EV on the 4th day of the second Tuesday while being a fisherman, married and single filing differences, end all of that.

I agree with your overall point of simplifying taxes by merging more things into income tax, but some of the taxes you mentioned are levied by local governments to fund themselves. The United States has a federal system; it would be a much bigger change to centralize all of the funding.

> The United States has a federal system

That doesn't prevent there being a single point of collection and distribution.

It sorta does, that's one of the primary points of a federal system.

Taxes aren't just there to provide an income stream to the government. It's also a mechanism to guide behavior via incentives (or punishment). Right or wrong there we're providing an incentive to hold assets longer, or use less fuel or buy from domestic producers etc.

IIRC, this was one of the main arguments for the Articles of Confederacy, the states were pretty nervous about this exact situation.

This was reaffirmed by Marshall [1] with the famous “the power to tax involves the power to destroy."

[1] https://www.archives.gov/milestone-documents/mcculloch-v-mar...

Didn’t they just get rid of the IRS automated filing app? You’ll have to kill off TurboTax and siblings to simplify the tax code.

Ok what about for the people that mainly earn their living not from an income paid by a job; ie the richest people in the country?

> Get rid of sales tax, property tax

The very first things you list aren't related to the IRS at all. They're local and state taxes, and to get rid of those would require a radical rewriting of the Constitution itself. Not to mention it would destroy all fire department, county hospital, school, city park, state park, etc. funding.

Of course they're not, but this is how you smell someone that doesn't really want to enforce paying taxes, but just wants to evade them as much as possible.

How quickly people show their colors.

I don't think that's fair. The US has so many administrative layers with taxing powers - federal, state, county, and municipal, and in many cases administrative bodies also charge massive filing fees, and courts charge large fees to finance themselves because they're consistently under-funded by legislatures.

So Americans get taxed a lot at many different levels of activity. The cognitive load of having so many different points of taxation is annoying and exhausting to a lot of people. It makes household budgeting a lot more work than it really needs to be.

But it is this way because of the Constitution

They maybe we should change that and have a simpler system with much less complexity. Dismissing people who object to the painful complexity of the US tax regime as 'evaders' is npt insightful or helpful.

Why would you simplify the tax code if the whole point of the tax code is to create loopholes so you can pay way less taxes than the public would vote for?

The tax code exists for Welfare Queen Billionaires like Elon Musk.

Well it's a retort on the 2022 IRA bill, which increased the IRS budget by 80 billion over 10 years, and paved the way to hire 87,000 people. There has been a lot of hiring recently so it's hard to tell one thing from another but this isn't so much of mass layoff as an attempt at returning to normal.

I'm starting to realize that an LLM isn't gonna take my job, but it's beginning to make the job aggravating enough to quit anyhow. So many managers have decided they're going to have an AI Miracle and aren't interested in hearing otherwise, no matter what staff tells them.

> So many managers have decided they're going to have an AI Miracle and aren't interested in hearing otherwise, no matter what staff tells them.

Managers' manager convinced them they should expect an AI Miracle. Now your job is to put on a show to pretend to create an AI Miracle so your manager and their manager can pat themselves on the back.

Under enough pressure to use AI people will just produce code as before but LLM-ize it with more comments and verbose crap to look like AI did it. "See boss, I am using AI, so happy you got us this tool".

However, if you do it too well the next step will be "we don't really need so and so, we'll just replace them with an AI agent since it was working out so well".

Unfortunately the big players are pretty entrenched so the degraded quality that appears once AI fails to replace laid off workers will have minimal impact on their bottom line. And the bar for government is literally as low as "Is this such bad UX that it will cause a revolution?".

So why would they care whether its Covid, AI or a Recession that gives them the excuse to do less and less. The system keeps on rolling, the rich get richer, normal peoples lives get incrementally shittier.

Everyday I am more and more pleased with our company's (or at least our company's tech department) to effectively ban AI.

The part I don't understand is why can't they wait for the efficiency gains to materialize before firing people? Better pay a few people for a few months extra than be wrong. If AI is going to bring in all this efficiency, this would be peanuts.

Because, for white collar jobs, that is so rare that it's reasonable to say that it never happens.

Its like the "throw him into the deep end" method of teaching kids to swim. (I don't endorse it, but it has worked for many people.)

An LLM may take the interesting parts of my job but the parts that suck (dealing with people) will never be taken over by an LLM.

Phone and chat support has already happened, robotic law enforcement is the future. Now pick up that can citizen.

Notably that isn't an accurate reference. The Combine officer is not a robot, so no robotic law enforcement happened.

> Naturally, AI is expected to play a significant role in all this, making people better at their jobs and more end-user-focused, he said.

> However, Pandya said IRS leaders are telling employees that AI won't endanger their jobs.

Not much of trump supporter myself, but I check HN for tech news rather than politics

They literally put a tax cheat as head of the IRS last year.

People considering speaking frankly about reality as hyperbolic is how we got here.

It's not hyperbolic, it's factual.

The headline say 40% based off something a single person said at a conference while the same article says the federal inspector general is saying a 16% reducation, as well as this quote:

> According to a report by the US Treasury Inspector General for Tax Administration, the IT department had 8,504 workers as of October 2024. As of October 2025, it had 7,135.

It always sets off my spidey sense when people say 'leadership' because too many conflate management with leadership, and that is unfortunately not always true.

Few managers are actually leaders. Many are trumped up scribes. And many leaders are not managers.

The thing that makes me nervous is the statement that they plan to use AI. AI? The thing that is mathematically incapable of perfection, on finance information, for which perfection is table stakes? Not to mention all the privacy issues (although that boat has sailed).

The people in charge have a pathological hatred for the IRS. AI is just an excuse to continue destroying the capabilities of the IRS. In the meantime, they’ll keep borrowing to fund the government while telling everyone it’s ok because they slashed programs that make up a tiny portion of the budget. This can go on until there is a major economic shock related to US debt, but honestly, most of them will be dead by the time that happens.

I thought I would give the Treasury the benefit of the doubt for a moment and check whether they meant LLMs like we're all assuming, or possibly a more specific finance-focused type of AI. Like how we have specialist neural net AI helping with radiology.

Looking at their official info document[1]... "a secure AI-based chat solution"... "AI-assisted code development"...

Okay they mean LLMs, carry on.

[1] https://home.treasury.gov/system/files/136/Treasury-AI-Strat...

I am not following, a lot of things get turned into python calculations, so the LLM is not doing the precise math.

If you think the state of the average tax return is "perfection as table stakes"..... you might be disappointed.

Most tax returns these days are prepared and submitted electronically so the basic work of the arithmetic involved should be as close as possible to perfect already. Evaluating that is going to be pretty mathematically intensive though and LLMs have been pretty bad at that. Tool usage has gotten it better so maybe they'll just hand off the validation to the existing traditional computing and mostly be vibes based, 'does this return look legit?' evaluation.

Consist strategy in hampering income:

> "Starve the beast" is a political strategy employed by American conservatives to limit government spending[1][2][3] by cutting taxes, to deprive the federal government of revenue in a deliberate effort to force it to reduce spending. The term "the beast", in this context, refers to the United States federal government and the programs it funds, primarily with American tax money, particularly social programs[1] such as education, welfare, Social Security, Medicare, and Medicaid.[3]

* https://en.wikipedia.org/wiki/Starve_the_beast

Of course the GOP isn't very good at cutting spending, so deficits (and debt) tend to go up under their administration.

I hope when someone else owns the whole government the beast becomes the us military.

Nah, it won't because ANY cuts to DoD will be met with

"Don't you support our troops"

Which is completely unrelated but it works very well as an attack line

They can always learn a new skill like programming.

AI audits for everybody. Of course they're going to do it.

Feels terrible to be an American rn, I'm preparing for major errors and delays in the processing of my tax return.

This follows the same logic as the claim that Biden bulldozed the border wall to make immigration law unenforceable. If you deliberately weaken enforcement capacity (and also burden/cripple government with unsustainable debt), you can then point to dysfunction as proof the system doesn’t work.

The only difference is that in this case, the stated goal of ‘starve the beast’ is intentionally sabotage the entire government as policy goal. Underfund agencies, expand deficits through tax cuts, then cite the resulting debt and institutional breakdown as justification to dismantle more of government.

It almost makes the people who were outraged at the idea of sabotaging border enforcement seem disingenuous that they don't now care that undermining federal capacity is public strategy.

The low income (under 25k) with EITC, were the largest audited group with 298,485 of 626,204 audits performed in 2022. The rest of those earning under 200k had 250,391 audits.[]

48% of audits were under 25k income. 87% of audits were people under 200k income.

Kind of interferes with the idea these audits were all about going after the uber rich. They were way more about going after the poor than they were about going after the rich.

[] l IRS management audit reports obtained via FOIA by via TRAC / https://tracreports.org/reports/706/

The point of prior recent investments in tax police (that the GOP worked to claw back) was specifically to enable the enforcement of complex cases (rich people) that they didn't have the bandwidth to engage.

It's super weird to believe auditing a normal person and auditing "the uber rich" is in any way comparable. In both cases the thing being done can be referred to as an "audit," but that's it.

I mean, $200k puts you well above the 90th percentile of earners in the US, so the IRS is (if only slightly) focusing extra resources on the wealthy. Audits go after people who have relatively obviously incorrect information on their taxes. For people under $25,000, there's a good chance they forgot a W2 or something, which means it's a quick identification and fix for the IRS.

Do you think gutting the IRS is going to improve that ratio?

How many of those <25k audits were completely automated? Going after the poor with an automated script at scale is basically free money for a government without compassion.

It's not "going after" the poor. You have to be out-right negligent to end up with any penalty at all, and the penalties involved are relatively small (20% of how much extra you owed them anyway). The vast majority of these low-income audits consist of "hey, we know you made money X, you didn't report it on your taxes. Fix it".

Cheating on tax credits also comes to mind

‘We know you’re trying to survive in your low income, but we want to extract more money from you so the billionaires don’t have to pay as much tax’

My good friend Sam Corcos is leading these efforts as the CIO of the Treasury Department. I know a good conspiracy theory about lowering taxes for the rich is much juicier, but if anyone is interested in learning more, he did an excellent interview on Chris Williamson’s podcast about how inefficient the IRS is:

https://youtu.be/u4odAXoqRT8?si=UCpIBm8yy5aIaJcg

Your good friend Sam is hanging out with a shitty crowd... read the site for yourself.

https://dogetrack.info/people/enabler-staff#sam-corcos

This is the case in all layoffs. Is there a bottom 10% of employees at OpenAI? By definition yes. If you do your absolute best to try and make redundant the bottom 10% of employees at OpenAI, how many of them do you think will actually be in the bottom 10%? I bet it's not all of them, it's probably not even close to half of them.

First you've got the good people who don't like the environment, they'll bite your arm off for the redundancy, then you've got the people who are doing fine but for whatever reason are happy enough to take their chances elsewhere, they'll be happy to be top of the redundancy list. Then you've got the good strong performer who pissed off the wrong person, they'll be on the list too. Then you've got the entire team that is really good and hardworking but senior management figure it's easy to just cut the entire team because their project isn't politically valuable. Before you know it the redundancy list is full and it has no correlation to the bottom 10% of performers, but because it's pretty much an almost random sample it does reduce your company's capability by 10%.

This is just the lazy comment of someone who believes all the right-wing propaganda about government. In my experience, government employees take pride in doing a job worth doing and doing it well.

Not all public sector jobs are the same. Working for a defense contractor is not the same as working for the IRS. Defense gets money dumped on it year after year. The IRS gets starved year after year.

They have worked recently to implement a self-hosted tax submission system and given their rate of return while there may be some mismanagement it is one of the most provably efficient organizations in the government netting 415$ for every dollar of funding in 2024.

I'm not saying we shouldn't have an IRS, and I think IRS agents are probably one of the best ROI gov't employees possible, but 8,500 IT engineers and managers (who I have heard literally didn't even know how to code) makes no sense at all

Isn’t that a completely bizarre metric though in this instance??! It is specifically the revenue generating arm of the government. If it wasn’t running at a “surplus” that would be very concerning indeed.

I did no verification on whether that metric is correct or not, but I would suspect the metric would be only measuring the amount of revenue the IRS "generated" from doing manual work like audits. The regular, I owe 1,000 in taxes, and I paid 1,000 in taxes. Wouldn't be considered +1,000 in that case, it would be excluded from the metric altogether. Only the additional "findings" from audits would be counted.

No the point is that if the IRS was at maximum efficiency, more funding wouldn't increase revenues because tax law is tax law: you can't market it or expand the customer base.

But if every new dollar currently produces much more then a dollar in returns, it means it's underfunded because taxes that should be collected, that by legal analysis would be planned for in budgeting, aren't.

And that matters for a great many things, but one reason is that if you pay taxes and want a tax cut then one reason you're not getting it is because actual revenues are lower then they should be due to uncollected taxes.

AKA tax fraud steals from the honest tax payer.

They have 150 million paying "customers" (not including businesses) and bring in $5 trillion+ yearly.

That's not the IT department's problem. Well, they'll get blamed, but that's pretty on-brand for IT departments.

It's not the IT department's fault, but it makes one wonder if the IT department needs to actually be that large, since customers need to do so much on their own.

Per capita the UK has 2.5x the IT workers in tax collection compared to the US (~25 IT per million vs 65 IT per million). But, those tax collection IT workers help create a system which means UK citizens don't spend hundreds of billions of dollars every year just to file their taxes.

I don't think this is the current administration to fix the IRS, given the whole Social Security scam SNAFU.

They built IRS Direct File which was a huge improvement. Then the administration killed it to serve tax prep companies.

The tax code is complex and Direct File isnt the only IRS digital service. It was built by F18 and USDS. You should inform yourself instead of being hysterical about numbers. If you inform yourself the numbers aren’t so scary.

The public sector is where you need 12 people (and a project manager) to build an Access database.

And the private sector is how the US has arrived at a miserable, unworkable healthcare system and an out of control carceral system.

Is there a single private sector more removed from market incentives than healthcare?

And yet all countries with socialized systems pay less per capita for healthcare than we do and pretty much all have better health outcomes. Further privatizing our system will only make it more dis-functional. Healthcare isn't a normal marketplace. * When you really need it, you can't shop around. * There is a knowledge asymmetry built in. * A civilized society can't just let poor children die of preventable causes.

I’m going to drop my doctor this year because he abuses appointments. I call in about an issue and he charges me $75 for telehealth. Then he wants me to come in to run labs for the telehealth call. Another $75 at least. Then another telehealth call for the results. And another one for the results from the radiology department. I told him I have a high out of pocket and he says “I’m sorry to hear that.” Then books me for a follow up.

Doctors do not care about the healthcare system one bit.