America's primary tax-collecting agency, commonly known as the IRS. As of 2024 it employed around 100,000 people. By comparison, Britain's tax agency employs 66,000.
Under a law passed in 1976, in the wake of Richard Nixon's resignation, public officials are expressly banned from sharing taxpayer data. Exceptions exist only for serious criminal investigations. Disclosing taxpayer information is a criminal offence that exposes individual civil servants to personal criminal jeopardy.
Around 9% of Americans still file paper tax returns, which must be manually transcribed into computers. During the pandemic, with offices closed, paper returns piled up: by summer 2022 there were 21m unprocessed paper returns. The wait to speak to a staff member on the phone rose to nearly 30 minutes, and only 20% of callers got through.
The Inflation Reduction Act under Joe Biden poured money into the agency, enabling a hiring surge that cleared the pandemic backlogs and cut phone waiting times to three minutes. The agency piloted Direct File, a free tool that fills in income details automatically from IRS records, making 30m people eligible by 2025.
Each year millions of undocumented immigrants pay some $66bn in federal taxes using bogus or borrowed Social Security numbers or taxpayer-identification numbers. Their tax filings include home addresses.
Donald Trump's administration has produced rapid leadership turnover: the agency averaged a new acting commissioner a month in the first quarter of 2025. Douglas O'Donnell retired after barely a month; Melanie Krause resigned after taking Elon Musk's DOGE offer of "deferred resignation"; Gary Shapley, a former enforcement agent who became prominent after alleging the IRS was "slow walking" its investigation into Hunter Biden, served just two days before being ousted at the instigation of Scott Bessent, the treasury secretary; Michael Faulkender, the deputy treasury secretary, took over on April 18th 2025.
Around 20,000 workers have taken deferred resignation and some 7,000 probationary employees have been fired. Plans submitted to the Office of Personnel Management would halve the number of tax-enforcement agents. According to the Yale Budget Lab, a 50% reduction in IRS headcount would cost from $395bn to $2.4trn over ten years in lost revenue.
Trump's nominee for full commissioner is Billy Long, a former congressman from Missouri with almost no tax experience, who previously proposed bills to abolish the IRS and replace income tax with a national sales tax.
DOGE software engineers have been trying to access IRS databases to help deport immigrants, but the 1976 taxpayer-privacy law has posed a legal obstacle.
If parents would only realize how they bore their children.