What TIGTA found
Taxpayers paid a record $5.3 trillion in FY 2025. Enforcement revenue fell from a high of $98.7 billion in FY 2024 to $93.8 billion in FY 2025, driven by a 35 percent drop in examination revenue.
The IRS lost roughly 27 percent of its Examination and Collection staff between FY 2024 and FY 2025, and its supplemental Inflation Reduction Act enforcement funding was exhausted as of December 31, 2025. TIGTA notes the downstream effects of the workforce reductions are likely to become more apparent over time.
Collection revenue rose 17 percent from FY 2023 to FY 2025, mainly from resumed automated collection notices. Individual examinations started fell 30 percent, including a 27 percent decline for taxpayers with incomes over $400,000. The report is informational, with no recommendations.
What it means for your clients
- Automation is the front line. Notices escalate on a schedule whether or not anyone at the IRS is watching the account. Missing a deadline now moves a client closer to levy just as fast as before.
- Fewer staff means slower help. When a case needs a person at the IRS, such as a penalty appeal or a stalled agreement, expect longer waits. Clean, complete submissions matter more.
- Lower audit numbers do not change what a client owes. The tax, penalties, and interest are the same, and assessment and collection periods keep running.
Next Step services that fit
- IRS Letter Response. Every automated notice answered correctly and on time, before it escalates.
- Stay Resolved. Monthly account monitoring that catches new notices and keeps resolved clients filed and paid.
- Monthly Payment Plan with the IRS. A payment plan in place stops most automated collection action.
- Penalty Removal. First-time relief or reasonable cause, documented the first time so it does not wait in a queue.
Source: Treasury Inspector General for Tax Administration, Trends in Compliance Activities Through Fiscal Year 2025, Report No. 2026-3S0-045. Reports are available at tigta.gov.
This summary is for tax professionals and is general information, not tax or legal advice for a specific situation. Figures are as reported by TIGTA. Results for any client depend on their facts, documentation, and IRS discretion.