The Internal Revenue Service collected $6.5 billion from audits in fiscal year 2025, a 35 percent decrease from the $10 billion collected the previous year, according to a Treasury Inspector General for Tax Administration (TIGTA) report released Monday. The decline follows President Trump's reduction of the federal workforce at the start of his second term, which caused the IRS to lose roughly 30 percent of its audit staff. The agency began 30 percent fewer individual audits compared to the prior year, and one major division paused new audits for six months due to staffing uncertainty.

IRS audits can take years, so the full budgetary impact may not be apparent for some time. The drop reverses Biden administration efforts that added $80 billion in funding and tens of thousands of employees to target wealthy taxpayers and large companies. Trump administration officials, including IRS CEO Frank Bisignano, argue artificial intelligence could improve audit selection and efficiency.

Representatives for the IRS and Treasury Department did not comment. Despite the audit revenue plunge, other enforcement efforts like mailed notices and phone calls yielded similar revenue. Overall tax revenue reached a record $5.3 trillion, though the IRS estimates $700 billion in taxes goes unpaid annually.