narayan
In a series of congressional hearings that coincided with the final days of tax filing season, Internal Revenue Service Chief Executive Officer Frank Bisignano defended the agency’s ability to pursue wealthy tax evaders despite losing more than 25,000 employees—approximately 27% of its workforce—over the past year and amid news that the Trump administration is proposing further budget cuts at the agency for fiscal year 2027.
Commitment to High-Income Enforcement
Speaking before the Senate Finance Committee and House Ways and Means Committee, Bisignano emphasized that the IRS remains committed to auditing high-income individuals and corporations, even as the agency grapples with unprecedented staffing cuts.
“There is no bias to any of it,” Bisignano stated during his testimony. “It’s every bad actor. You are not going to have the type of revenue we have coming in from enforcement if you are not collecting from highly compensated people and bad actors.”
The IRS chief was on the defensive as Democrats expressed skepticism about the agency’s ability to maintain effective operations with such dramatic workforce reductions and continued to grill him on whether the agency has sufficient manpower to audit high-income individuals amid the ongoing staffing cuts. According to Bisignano, enforcement revenue has increased by 12% this year, with the agency collecting approximately $2 billion from its top five cases. The IRS has also sent 500,000 letters over the last two months alone to taxpayers who were underreporting income, resulting in $250 million in additional revenue. However, these figures stand in stark contrast to projections showing a significant decline in audit activity. According to the IRS’s recent budget request, the number of audit starts on high-income individuals is expected to drop to 2,264 in fiscal year 2026, down from 6,786 in fiscal year 2025—a reduction of more than 66%.
Technology Over Personnel
Bisignano’s strategy for maintaining enforcement capabilities centers on leveraging technology, such as artificial intelligence, rather than human resources, which, he argued, allows remaining staff to focus on more complex cases requiring in-person or phone assistance. “We are building an IRS that leverages advanced technology, empowers its workforce with better tools and delivers secure and easily accessible services,” he told lawmakers. About 98% of returns and refunds this tax season were received electronically.
Despite reassurance from Bisignano that all is well, lawmakers continued to express concerns about customer service levels during the 2026 tax filing season, including about the workload on remaining staff, noting that a recent project conducted by the Center for Taxpayer Rights found that wait times on the automated collection services lines for individuals and businesses were over an hour, with 37% of calls ending in disconnects.
The Tax Gap Challenge
The enforcement challenges come as the IRS evaluates the tax gap—the difference between taxes owed and taxes paid—which stands at approximately $696 billion for fiscal year 2022, the latest year for which data is available. Yale’s Budget Lab research estimates that IRS cuts to staffing and funding have likely resulted in an $861 billion reduction in revenue, far outweighing any short-term savings from workforce reductions.
Outlook
Bisignano, who serves simultaneously as both IRS CEO and Commissioner of the Social Security Administration—a dual role that has him working 14-hour days managing two large federal agencies—remains confident in the agency’s direction, despite being called out by Democrats as being a prime example himself of an employee being overworked.
As audit rates for high-income taxpayers plummet and the tax gap remains in the hundreds of billions, the coming years will test whether technology can truly compensate for the loss of experienced enforcement personnel—and whether the IRS can fulfill its promise to pursue “every bad actor” regardless of wealth or status.
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