Summers Warns Trump's IRS Cuts Could Cost $1 Trillion

Former Treasury Secretary Lawrence Summers has strongly criticized the Trump administration's sweeping cuts and ongoing leadership turmoil at the Internal Revenue Service (IRS), warning that these moves could cost the federal government over $1 trillion in lost revenue over the next decade. Summers argues that the downsizing and instability threaten the foundation of the U.S. tax system, which relies on voluntary compliance, and may encourage more widespread tax evasion and underreporting. The IRS has faced repeated leadership shake-ups, including five different acting commissioners since January, and significant workforce reductions, with tens of thousands of employees departing or being placed on administrative leave. Cuts include a 75% reduction in the IRS’s Office of Civil Rights and Compliance and broader layoffs intended to 'increase efficiency and effectiveness,' but critics say these changes undermine the agency’s ability to collect taxes and conduct audits. Other experts, such as Natasha Sarin, suggest the revenue losses could be even higher than Summers' estimate, highlighting a growing gap between taxes owed and collected. Treasury Secretary Scott Bessent has acknowledged the need to restore trust at the IRS following controversial appointments and ongoing unrest.