Digital Assets DOGE proposes slashing Internal Revenue Service staff by 20%

The Department of Government Efficiency (DOGE) is reportedly proposing cutting the Internal Revenue Service’s (IRS) workforce by 20% in a change expected to take effect by May 15, 2025.
According to CNN, the cuts would impact an estimated 6,800 employees at the government agency, in addition to the 6,700 probationary employees who have already been let go and 4,700 IRS agents who were given severance packages to retire.

However, a recent ruling from US district judge William Alsup ordering federal agencies to reinstate probationary workers terminated due to the DOGE cost-cutting programs could hinder the layoffs if the order is not overturned.

President Trump has promised comprehensive tax reform in the United States, including potentially eliminating the federal income tax and funding the federal government exclusively through tariffs on foreign goods.



Related: Crypto taxes, DOGE, Trump and avoiding an IRS audit: Taxbit exec spills the tea

DOGE pursues cost-cutting and efficiency strategies

The Department of Government Efficiency, headed by businessman Elon Musk, is exploring methods to reduce the $36 trillion US national debt by substantially reducing the size of the federal bureaucracy and introducing cost-cutting measures.

One of the more unique measures proposed included putting all public spending onchain to reduce deficits and ensure transparency.

On Feb. 21, the Securities and Exchange Commission (SEC) announced it was cutting its regional office directors to comply with the Trump administration’s cost-saving directives.

However, under the reorganization plan, the regional offices, which are spread out across major US cities, would stay open, and the SEC recently submitted its 2025 budget proposal to Congress requesting $2.6 billion.



President Trump and Elon Musk have considered passing on 20% of the DOGE savings to Americans in a stimulus check or potential tax credits.

Research from accounting automation company Dancing Numbers argued that Trump’s plan to eliminate federal income tax could save the average American $134,809 in taxes throughout their lives.

The company added that these lifetime tax savings could extend to as much as $325,561 per person if other wage-based taxes at the state level are also repealed.

Despite this, not everyone is convinced by DOGE’s cost-cutting tactics, including US Senator Elizabeth Warren, who is highly critical of Elon Musk, Trump, and DOGE.

In January 2025, the Massachusetts Senator sent a letter to the DOGE proposing increasing taxes and federal spending to make the government more efficient.

Magazine: Elon Musk’s plan to run government on blockchain faces uphill battle

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