Also for reference, in 2024 the IRS had a rate of return of 415:1, they'll obviously target the lowest hanging fruit first but for every dollar of funding received they collected 415 dollars of tax revenue that would have been missed. This is an obscenely efficient organization.
They barely have any products, and they contract externally for so much other work
Audits are not an infinite money glitch. I used to work for a Federal audit agency that also recovered ~10:1. The reason we target 10:1 recovery on audits is because the return on funding additional audits beyond that falls off very sharply. Furthermore, more aggressive auditing greatly increases compliance costs which ultimately come back as costs to the Federal government, so the net recovered revenue is even less than the headline figure.
Audit recoveries tend to be about sloppy compliance, not people trying to cheat the system. People with more complex taxes are more likely to screw up the exponentially more complex compliance aspects. Auditors are mostly fighting entropy.
Get rid of sales tax, property tax, exemptions, IRAs, 401ks, short capital gains, long capital gains, medicare, state, all of that bullcrap. Annualized, non-annualized, credits for having an EV on the 4th day of the second Tuesday while being a fisherman, married and single filing differences, end all of that.
Just have one income tax. It should be the sigmoid of your income normalized to the median income in your zip code, then scale it so that the total of everyone's taxes added up makes up for all the other types of tax that we're getting rid of.
The IRS should then distribute whatever is needed to the states. The states are part of the country, their hierarchy is not my problem; give me one number to pay. My tax return should be no bigger than a postcard.
Done.
Looking at their official info document[1]... "a secure AI-based chat solution"... "AI-assisted code development"...
Okay they mean LLMs, carry on.
[1] https://home.treasury.gov/system/files/136/Treasury-AI-Strat...
The only difference is that in this case, the stated goal of ‘starve the beast’ is intentionally sabotage the entire government as policy goal. Underfund agencies, expand deficits through tax cuts, then cite the resulting debt and institutional breakdown as justification to dismantle more of government.
It almost makes the people who were outraged at the idea of sabotaging border enforcement seem disingenuous that they don't now care that undermining federal capacity is public strategy.
First you've got the good people who don't like the environment, they'll bite your arm off for the redundancy, then you've got the people who are doing fine but for whatever reason are happy enough to take their chances elsewhere, they'll be happy to be top of the redundancy list. Then you've got the good strong performer who pissed off the wrong person, they'll be on the list too. Then you've got the entire team that is really good and hardworking but senior management figure it's easy to just cut the entire team because their project isn't politically valuable. Before you know it the redundancy list is full and it has no correlation to the bottom 10% of performers, but because it's pretty much an almost random sample it does reduce your company's capability by 10%.
So why would they care whether its Covid, AI or a Recession that gives them the excuse to do less and less. The system keeps on rolling, the rich get richer, normal peoples lives get incrementally shittier.
Managers' manager convinced them they should expect an AI Miracle. Now your job is to put on a show to pretend to create an AI Miracle so your manager and their manager can pat themselves on the back.
Under enough pressure to use AI people will just produce code as before but LLM-ize it with more comments and verbose crap to look like AI did it. "See boss, I am using AI, so happy you got us this tool".
However, if you do it too well the next step will be "we don't really need so and so, we'll just replace them with an AI agent since it was working out so well".
Putting money into the IRS is basically a free money printer for the US government and it's only deep corruption that keeps it so poorly funded.
Until we simplify the tax code, though, can we properly fund the IRS to actually audit it? I think my thing (funding the IRS) is a lot easier to do quickly than your thing (completely rewriting how the government garners revenue) and I don't want perfection to be the enemy of the good.
48% of audits were under 25k income. 87% of audits were people under 200k income.
Kind of interferes with the idea these audits were all about going after the uber rich. They were way more about going after the poor than they were about going after the rich.
[] l IRS management audit reports obtained via FOIA by via TRAC / https://tracreports.org/reports/706/
The problem is these metrics aren't really scalable productivity metrics. If you doubled cost, it might go to 100:1, if you tripled cost, it might go to 0.5:1
Each dollar generally gets more expensive to capture.
I agree with your overall point of simplifying taxes by merging more things into income tax, but some of the taxes you mentioned are levied by local governments to fund themselves. The United States has a federal system; it would be a much bigger change to centralize all of the funding.
Job cuts at the IRS's tech arm have gone faster and farther than expected, with 40 percent of IT staff and four-fifths of tech leaders gone, the agency's CIO revealed yesterday.
Kaschit Pandya detailed the extent of the tech reorganization during a panel at the Association of Government Accountants yesterday, describing it as the biggest in two decades.
This happened as the Trump administration reshaped the federal bureaucracy last year with Elon Musk's DOGE wielding the chainsaw.
The IRS lost a quarter of its workforce overall in 2025. But the tech team was clearly affected more deeply. At the start of the year, the team encompassed around 8,500 employees.
As reported by Federal News Network (FNN), Pandya said: "Last year, we lost approximately 40 percent of the IT staff and nearly 80 percent of the execs."
"So clearly there was an opportunity, and I thought the opportunity that we needed to really execute was reorganizing."
That included breaking up silos within the organization, he said. "Everyone was operating in their own department or area."
It is not entirely clear where all those staff have gone. According to a report by the US Treasury Inspector General for Tax Administration, the IT department had 8,504 workers as of October 2024. As of October 2025, it had 7,135.
However, reports say that as part of the reorganization, 1,000 techies were detailed to work on delivering frontline services during the US tax season. According to FNN, those employees have questioned the wisdom of this move and its implementation.
At yesterday's conference, Pandya said better outcomes had yet to be delivered. "What it didn't lead to is automatically everybody coming together and working as one team. We just had different silos," he said. But his department had now set up "cross-functional" teams focused on end-to-end delivery of individual projects.
"This way there isn't a cold hand-off of, 'My job is X, and now I'm handing it off to somebody else,'" he said.
Ultimately, he said the aim was to have the IT group as a whole working toward a "scorecard."
Naturally, AI is expected to play a significant role in all this, making people better at their jobs and more end-user-focused, he said.
However, Pandya said IRS leaders are telling employees that AI won't endanger their jobs. Clearly the agency is perfectly capable of getting rid of people the old-fashioned way.
The US Treasury Inspector General for Tax Administration said last month the agency was behind in its efforts to digitize paper returns. It noted: "The Information Technology function lost approximately 16 percent of its staff," who are responsible for updates for inflation and expiring or newly enacted tax provisions. This meant that "according to the IRS readiness reports, implementation of these legislative changes is at risk for the 2026 Filing Season." ®
> However, Pandya said IRS leaders are telling employees that AI won't endanger their jobs.
Not much of trump supporter myself, but I check HN for tech news rather than politics
Not that impressive.
I'd be more impressed we got rid of income tax on salaried people entirely, or permit families the same type of deductions that businesses get, and only tax my actual profit - I can't deduct my overpriced housing, or my utilities unless I have a home office for ny own business.
Next month's headline: "IRS signs 200-million dollar deal with Grok to use AI to analyse tax returns, determine who gets audited".
The tax code exists for Welfare Queen Billionaires like Elon Musk.
The very first things you list aren't related to the IRS at all. They're local and state taxes, and to get rid of those would require a radical rewriting of the Constitution itself. Not to mention it would destroy all fire department, county hospital, school, city park, state park, etc. funding.
That's wildly hyperbolic.
IRS direct file is just not that complex, I promise you, and are you sure it was even built in house vs contracted?
a) People who filled in the wrong number on the spreadsheet that is taxes for whatever reason, and the audit is informing the filer that they filled it out incorrectly. I mean, really, taxes should start with the government sending me the form of what it thinks I owe and I should be making corrections to that, since the government already has this information and has done it, and that would make many of these audits go away.
b) People who misunderstood eligibility requirements and claimed deductions they weren't entitled to.
c) So I don't know how these people are counted, but there are absolutely millionaires and billionaires out there cheating on their taxes and claiming no income (e.g., the current president). It's totally plausible that they get listed in the "under 25k income" audit section despite the fact that they are in fact the uber-rich that is the intended target of the outrage.
The real risk isn't that AI can't find anomalies — it's great at that. The risk is that the people creating complex avoidance structures will use AI too, and they'll iterate faster than a government system updated on procurement cycles. You end up with AI vs AI where one side has a 3-year upgrade timeline and the other ships weekly.
Just have a script with “what are the taxes owed by $name” and print the output
I’ll take $5M now and you can own 50% of my startup: GenTaxAI
This was reaffirmed by Marshall [1] with the famous “the power to tax involves the power to destroy."
[1] https://www.archives.gov/milestone-documents/mcculloch-v-mar...
what stops "local governments" from applying same type of tax as higher levels? why would they need taxes specific for them?
That doesn't prevent there being a single point of collection and distribution.
We also want to balance regressive and progressive taxes, we do want to influence some behaviors through taxes that provide positive social outcomes - there are several really good complexities to have in our tax code. Just not as many as we do today.
People considering speaking frankly about reality as hyperbolic is how we got here.
Health insurance being tied to employment benefits is because the IRS taxes money, but not benefits, for example.
How quickly people show their colors.
There's a sleight of hand in your argument here. I said under 25k with EITC. You can't get EITC if you're "claiming no income." That's why it's called earned income tax credit as the credit is intended to help offset welfare cliffs as you start to earn more money but at low incomes. So your whole paragraph here about <25k is null and void as "millionaires and billionaires out there cheating on their taxes and claiming no income" aren't in the <25k EITC bucket I mentioned, they're in the bucket of others earning under 200k.
(As an aside, if someone actually thinks earns nothing and doesn't want EITC which they can't get anyway with zero income they probably won't even be filing, there is no "return" to audit.)
But if every new dollar currently produces much more then a dollar in returns, it means it's underfunded because taxes that should be collected, that by legal analysis would be planned for in budgeting, aren't.
And that matters for a great many things, but one reason is that if you pay taxes and want a tax cut then one reason you're not getting it is because actual revenues are lower then they should be due to uncollected taxes.
AKA tax fraud steals from the honest tax payer.
If we had a single formula for taxes, then each taxing body could have their own rate table to apply to it, but still collect it directly - then I think that would be a better approach.
For simplicity sake, take income tax at flat rates. Federal may be 20%, your state might be 10%, city might be 5%. Maybe my state rate is only 5% and you might want to move here, but nationally we all pay the Federal 20% rate.
In Canada provinces can choose to harmonize taxes or collect independently.
So Americans get taxed a lot at many different levels of activity. The cognitive load of having so many different points of taxation is annoying and exhausting to a lot of people. It makes household budgeting a lot more work than it really needs to be.
But it is this way because of the Constitution
They maybe we should change that and have a simpler system with much less complexity. Dismissing people who object to the painful complexity of the US tax regime as 'evaders' is npt insightful or helpful.
Per capita the UK has 2.5x the IT workers in tax collection compared to the US (~25 IT per million vs 65 IT per million). But, those tax collection IT workers help create a system which means UK citizens don't spend hundreds of billions of dollars every year just to file their taxes.
There is no singular place we can change how many different taxes you pay. There's... thousands? Tens of thousands? Once you factor in city, county, state, federal, special districts, etc.
Poor people pay very little income tax, as is the entire point of a progressive set of tax brackets and a large standard deduction.
It is trivial to not do your taxes wrong if you have legal employment. If you for some reason doubt your ability to do a couple calculations and copy over 6 numbers to a simple form, Turbotax will do that "hard work" for you for $30.
Even using Turbotax, I once failed to report a W2 (because I technically had more than one job) and the "penalty" was a letter that said "Hi, you missed this, we fixed it, give us $270 + $1 interest", which I never responded to because I am disordered, so they took my state income tax return.
No court. No threat. No serious penalty. I didn't even have to talk to anyone.
If we are talking about poor people, who by definition have minimal income, how do you think they supposedly would get hit by some giant IRS penalty? What is the magical pathway?
Doctors do not care about the healthcare system one bit.
Someone has to pay to operate a nation state, you can’t borrow forever to fill the gap and there’s nothing left to cut. Roughly the bottom 60% of Americans do not make enough to have a federal income tax liability. So, we can kick the can on the top 40% paying until the bond vigilantes make the decision for the US.
Wholeheartedly agree, but I see the root cause of the issue being income tax itself. As soon as you tax income, you'll go down and endless rabbit hole of what's fair to tax, how much, what kind of income, investment income vs wage income, percentage vs flat rate, etc...
That gave us the mess we have.
I like the idea of consumption tax exclusively (would require an amendment). You're taxed on your purchases.
It's easy to drive behavior (more tax on some things... tax on cigarettes, yachts and private jets) and easy to make more fair (exclude grocery staples).
Stated reasons may or may not be actual.
If you recall these were not just accountants but agents who carry guns etc.
I see this as very similar to the ICE situation. Biden has loyalty and power in IRS and so gave it money to help him police. As the government gets more corrupted I think we’ll find more agencies weaponized like this.
The equivalent question is can you provide proof that ICE is loyal to Trump?