The Department of Government Efficiency (DOGE) is reportedly advocating for a 20% reduction in the Internal Revenue Service’s (IRS) workforce, with this change anticipated to take effect by May 15, 2025.
As per CNN, this reduction would affect approximately 6,800 employees at the IRS, in addition to the 6,700 probationary staff already dismissed and 4,700 IRS agents who received severance packages to retire.
However, a recent ruling from US District Judge William Alsup, which mandates the reinstatement of probationary workers let go due to DOGE’s cost-cutting initiatives, could potentially complicate these layoffs if the ruling stands.
President Trump has pledged to implement comprehensive tax reform in the United States, which may include abolishing the federal income tax and solely financing the federal government through tariffs on international goods.
DOGE’s Strategies for Cost-Cutting and Efficiency
Led by businessman Elon Musk, the Department of Government Efficiency is investigating ways to significantly reduce the $36 trillion national debt of the US by trimming down the federal bureaucracy and implementing cost-saving measures.
Among the more distinctive proposals is to place all public expenditures onchain, aiming to reduce deficits and enhance transparency.
On February 21, the Securities and Exchange Commission (SEC) declared it would reduce its regional office directors in alignment with the cost-saving initiatives from the Trump administration.
Nonetheless, the regional offices, which are located in major US cities, are set to remain operational under the reorganization plan, and the SEC has recently submitted its 2025 budget request to Congress, seeking $2.6 billion.
President Trump and Elon Musk are considering passing a portion of the savings from DOGE—specifically, 20%—to Americans through stimulus checks or possible tax credits.
Research conducted by accounting automation firm Dancing Numbers indicated that eliminating the federal income tax could result in lifetime tax savings of $134,809 for the average American.
The firm further suggested that if other wage-based taxes at the state level were also abolished, these lifetime tax savings could rise to as much as $325,561 per individual.
Despite this, there are skeptics regarding DOGE’s cost-cutting strategies, including US Senator Elizabeth Warren, who has been notably critical of Elon Musk, Trump, and DOGE.
In January 2025, Senator Warren from Massachusetts sent a letter to DOGE advocating for increased taxes and federal spending to enhance government efficiency.
