IRS Layoffs, Compliance Delays, and AI Audits — What’s Next?

The IRS is undergoing significant workforce reductions, with thousands of employees leaving through layoffs, buyouts, and attrition. While some may welcome the idea of a smaller IRS, tax professionals should prepare for longer delays in audits, appeals, refund claims, and voluntary disclosure cases. In this episode of the Meadows Collier Podcast, Joel Crouch and Matt Roberts discuss how these staffing cuts will impact tax enforcement, compliance, and practitioner-client interactions.

With fewer personnel, the IRS is expected to lean more heavily on artificial intelligence and data analytics to select audits and enforce tax compliance, raising questions about the accuracy and fairness of AI-driven enforcement models. The episode also examines ongoing legal challenges to the Corporate Transparency Act, potential rollbacks in crypto tax reporting obligations, and the likelihood of a resurgence in aggressive tax shelters and questionable tax positions as enforcement capacity diminishes.

Tax attorneys, CPAs, and other professionals advising clients on IRS disputes, tax compliance, and federal reporting requirements will gain valuable insight into how these changes could reshape the tax landscape. Whether navigating delays in IRS interactions, shifts in voluntary disclosure policies, or evolving enforcement strategies, this discussion provides the critical updates needed to stay ahead of emerging challenges in tax administration.