Elon Musk’s D.O.G.E. Will Reduce IRS Staff by 20%

The Department of Government Efficiency (D.O.G.E.) proposes to reduce the workforce of the Internal Revenue Service (IRS) by 20%, a measure that would take effect on May 15, 2025.

According to CNN, this measure will affect approximately 6,800 employees, in addition to the 6,700 probationary employees who have already been dismissed and 4,700 IRS agents who received a severance payment for early retirement. However, a recent ruling by District Judge William Alsup, who allowed dismissed probationary employees to be reinstated, could thwart these plans if the decision holds.

President Donald Trump is pushing an ambitious tax reform, with the possible highlight being the abolition of federal income tax. The government would then run entirely on tariffs on foreign goods. Under the leadership of Elon Musk, D.O.G.E. is looking for ways to tackle the US national debt of $36 trillion by reducing and making the federal bureaucracy more efficient. A striking idea is to put all government spending ‘on-chain’ for more transparency and lower deficits.

Wider cost-saving plan

On February 21, the Securities and Exchange Commission (SEC) announced that it is dismissing its regional office directors to comply with D.O.G.E. guidelines, although the offices will remain open. The SEC submitted a budget proposal of $2.6 billion for 2025. Meanwhile, Trump and Musk are considering returning 20% of the savings to Americans through stimulus checks or tax benefits. Research by Dancing Numbers suggests that scrapping federal income tax could save an American an average of $134,809 over a lifetime, rising to $325,561 if state taxes also disappear.

However, not everyone supports DOGE’s approach. Senator Elizabeth Warren from Massachusetts leveled strong criticism at Musk, Trump, and D.O.G.E. In a January 2025 letter, she proposed higher taxes and spending to make the government more efficient, a contrast with D.O.G.E.’s course. As the national debt continues to grow, according to the US Debt Clock, the question remains how these reforms will affect the economy and the crypto market. The outcome depends on legal and political hurdles in the coming months.