IRS Staff Reduction: Crypto Strategy Hit as DOGE Cuts Deep
Impact of IRS Staff Reduction: Key Crypto Leaders Exit Amid Federal Cu Key Crypto Directors Exit Internal Revenue ServiceThe ongoing IRS staff reduction has impacted two prominent officials leading its crypto strategy, Seth Wilks and Raj Mukherjee, they have left their posts after accepting deferred resignation offers under a federal workforce curtailment initiative. Though technically still employed, both were placed on paid administrative leave as of Friday. This personnel curtailment is an outcome of a broader attempt by the Department of Government Efficiency (DOGE) to curtail federal agencies, a move supported by the present Trump administration.Background: Crypto Industry Veterans Tasked with Modernizing The AgencyWilks and Mukherjee joined the Internal Revenue Service in February 2024 after successful careers in the private crypto sector—Wilks at TaxBit and Mukherjee at ConsenSys and Binance.US. They were introduced to oversee the federal agency's Digital Asset Initiative, a program centered on reconditioning the agency’s crypto tax policies, enforcement mechanisms, and industry coordination. Their efforts incorporated work on the amended 1099-DA tax form to help U.S. taxpayers report digital asset transactions and participation in drafting new tax regulations for crypto markets. The series of IRS staff reduction has taken both of them into its grasp.What is Internal Revenue Service, and Why is it Targeted?It is headquartered in Washington, and U.S. Federal Agency constituted for collecting taxes and overseeing the internal revenue code. The Department of Treasury is its parent agency. Internal Revenue Service conducts audits, manages tax returns, and ensures compliance with Internal Revenue Code. It has a large hired-hands and budget making it a main focus for DOGE’s cost cutting endeavours. It claims that it has saved $2 billion by cutting wasteful spending, like unused auto-renewed contracts. However, critics warn that these reductions could negatively impact the agency’s efforts to modernize and enforce tax rules, especially for the new areas like cryptocurrency. DOGE claims that it is pushing to scale back the agency significantly as a part of cost cutting strategy as particularly this federal department is overly bureaucratic and has more staff than needed. DOGE has been brutal since it commenced IRS staff reduction.IRS Staff: Political Shift and Budget CurtailmentsThe root cause of the resignations lies in a political change and administrative curtailments efforts. The Trump administration, through DOGE, offered deferred resignation packages to thousands of federal employees as a cost-cutting measure. During IRS staff reduction, over 20,000 employees reportedly opted in. Sources indicate that Wilks and Mukherjee’s departures were voluntary but expected as part of broader IRS personnel reduction. The Congressional Review Act was recently used to overturn a major crypto reporting rule implemented during the Biden administration, further signaling the regulatory rollback and policy shifts under Trump.IRS Staff Reduction, Legal Challenges, and Public Trust at RiskAt the Internal Revenue Service, about 45,000 jobs are expected to be cut by May 15, and 7000 probationary employees have already been let go. Legal experts and privacy groups are warning about DOGE’s push to access sensitive data. Some advocacy watchdog groups have already filed lawsuits, arguing that DOGE’s actions could lead to data being shared without permission. Taxpayers are also getting concerned especially about how the job cuts might affect customer service and how long it takes to get tax refunds. If DOGE continues with its plans of job reduction, it could face even bigger changes in the coming months. IRS staff reduction is a topic of much debate in the USA. Also read: Dropee Daily Combo And Question of the Day 04 May 2025