January 27,2026

Wyden Leads Democrats Warning that Trump IRS Cuts Will Overburden Working Class with Audits and Help the Rich Cheat

Washington, D.C. – Senate Finance Committee Ranking Member Ron Wyden (D-Ore.) and nine Senate colleagues warned the Trump administration on Monday that its deep IRS cuts would overburden working- and middle-class Americans with audits while helping big, profitable businesses and the ultra-wealthy get away with cheating on their taxes.

“As we debate funding levels, no one has to theorize about the likely effects of steep budget cuts on IRS enforcement,” the senators wrote in a letter to Treasury Secretary Bessent, the acting head of the IRS. “Recent history tells us that the administration’s plans for the IRS will shift the burden of audits more heavily onto working Americans while giving rich scofflaws and big businesses a green light to cheat on their taxes. The administration has failed to detail any serious plan to avoid that unfair outcome. Congress needs answers to evaluate the administration’s budget requests.”

In their letter, available in full here, the senators noted that recent cuts have slashed IRS resources and driven away more than a quarter of the revenue agents who specialize in tax enforcement of wealthy individuals and large businesses, including partnerships and corporations. The Trump administration has also retasked many IRS Criminal Investigations agents to anti-immigrant assignments, taking them away from their typical duties rooting out terrorists, drug dealers, human traffickers and ultra-wealthy tax evaders.

The senators also noted that when Congress last slashed IRS resources, between 2010 and 2021, taxpayer service crumbled and audit rates for millionaires and billionaires fell by 77 percent. Audit rates for corporations were cut in half. More than 100,000 high-income individuals chose to violate the law by failing to file tax returns, and they faced no consequences until a Democratic Congress launched a new enforcement effort years later.

Joining Senator Wyden on the letter were the following senators: Sheldon Whitehouse (D-R.I.); Brian Schatz (D-Hawaii); Tammy Baldwin (D-Wis.); Angus King (I-Maine); Elizabeth Warren (D-Mass.); Chris Van Hollen (D-Md.); Ben Ray Lujan (D-N.M.); Reverent Raphael Warnock (D-Ga.); and Peter Welch (D-Vt.).

The senators’ letter asked the following questions:

  1. Enforcement functions: What specific enforcement tasks does Treasury believe AI can replace or materially augment in the absence of revenue agents? Identify which functions in large-partnership, large-corporation, and high-wealth examinations are expected to rely on AI, and separately, which still require trained personnel.
  2. Evidence of effectiveness: What pilots, back-testing, or validation studies demonstrate that current or planned AI tools improve detection, adjustment rates, or revenue yield in complex, high-dollar cases compared with revenue-agent-led examinations? Provide results by tool and taxpayer segment.
  3. Audit mix safeguards: With staffing reduced and AI expanded, what safeguards will prevent enforcement from shifting toward easier correspondence audits of lower-income taxpayers? Provide targets for audit coverage by examination type and income level for FY 2026 and FY 2027.
  4. Staffing thresholds: What operational capability thresholds of AI competence or performance are needed to provide IRS management with confidence that it can rely on AI and reduce enforcement staffing, particularly among revenue agents assigned to large-partnership and large-corporation examinations?
  5. Technology cuts: How will proposed technology funding cuts and IRA rescissions affect the development, deployment, security, and oversight of AI systems used in enforcement? Identify projects delayed, paused, or canceled as a result.
  6. Bias and accountability: What protections ensure that AI-driven enforcement decisions are auditable, explainable, and free from bias, including racial bias? What steps did the IRS take during this administration in 2025 to address racial disparities in audit selection, and what is planned for 2026 and beyond?
  7. Criminal investigation capacity: How many Criminal Investigation agents have been reassigned to immigration enforcement, for how long, and what tax enforcement work was delayed or foregone as a result?
  8. Program reductions: Which enforcement initiatives have been reduced, paused, or terminated since the beginning of 2025, and why? How many audits were paused or terminated as a result of staffing reductions or retirements? How long were the audits delayed? Identify these reductions by audit type, including examinations of Forms 1120, 1065, 1040 (by income band), 990, and any other major return categories.
  9. Capabilities foregone: Given proposed FY 2026 funding levels and IRA rescissions, what specific enforcement, modernization, and taxpayer service capabilities will the IRS no longer be able to sustain?
  10. Large partnership audit initiative: The IRS announced the creation of a specialized large-partnership audit group in recent years to address historically low audit rates and complex noncompliance among large partnerships. (For purposes of this question, exclude examinations primarily related to listed transactions or issue-based campaigns, including syndicated conservation easements.)
    1. What is the current size of this group (staffing levels by role), and how has that changed since its launch?
    2. Which campaigns, enforcement initiatives, or projects undertaken by this group have been paused, delayed, reduced, or abandoned, comparing the period prior to 2025 with 2025 and beyond? For each such campaign or project, identify the number of employees assigned in each period.
    3. What measurable outcomes has the group achieved, including audits initiated and completed, adjustments proposed, and revenue assessed or collected? Please break the following data out for the periods before 2025 and after:
      1. The number of audits initiated;
      2. The number of audits closed, broken out by closed with adjustment, no change, survey, or other disposition; and
      3. The primary issue types examined and auditor hours by issue.
    4. How have recent staffing losses, funding proposals, and the use of AI affected this group’s operations and future plans?

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