Taxpayer advocate on DOGE access to IRS data

(CNN) — The chaos at the Internal Revenue Service began almost immediately after the first envoy from the Department of Government Efficiency arrived last month at the agency’s Washington, DC, headquarters.

Within minutes of showing up, a twenty-something software engineer dispatched from DOGE began demanding access to the tax collection agency’s most protected internal databases – first the IT systems and then one containing the personal and financial data for millions of American taxpayers and another system housing IRS contracts.

Another DOGE staffer sought to shut down nearly all of IRS’s congressionally funded programs and initiatives planned for this fiscal year – many aimed at modernizing the agency and improving the tax filing process.

As DOGE has set up shop inside the IRS over the past month, the agency has fired thousands of workers and auditors and set out to shutter more than 110 taxpayer assistance offices across the country. Widespread layoffs are in the works, with plans to cut nearly 20% of all IRS employees by May 15.

The barnstorming, which has played out at multiple agencies, has thrown the IRS into turmoil at the height of tax season. While the business of processing returns and issuing refunds has been ongoing, sources say these DOGE actions could undermine the long-term operations of the IRS, which handles nearly all accounts receivable for the federal government.

In interviews with CNN, multiple current and former IRS officials, who spoke on the condition that they remain anonymous, described an atmosphere of intimidation, especially of career staffers.

“They just randomly drop by people’s offices, demanding access to systems; they’re bullying us and there’s no discipline in what they are doing, which really worries me,” said one IRS employee.

“It’s a clusterf***, and I can’t believe no one is stepping in to do anything,” said another top staffer who worked at the IRS.

“We are paralyzed,” said a third IRS source.

Another current IRS employee, who works outside Washington and is a local union leader, said it’s now routine to see people crying in the office and managers going around apologizing for firings they had no decision in.

“Morale is suffering,” the person said.

Nina Olson, who served from 2001 to 2019 as the independent National Taxpayer Advocate within the IRS, said the cuts were “basically gutting the agency” by hollowing out the ranks, putting the IRS’ future at risk.

“You’ve got a lot of new blood getting fired, that’s supposed to be the future of the workforce,” Olson said, referring to the agency’s newly hired probationary employees. “Then you’ve got the most skilled people, at the height of their institutional knowledge, leaving through retirement.”

Olson, who now runs the nonpartisan Center for Taxpayer Rights, criticized this “shotgun approach” to staff reductions and predicated, “none of this bodes well for the taxpayers.”

In response to CNN’s reporting, the White House press secretary said in a statement, “This story is based on anonymous sources and the fraudsters always scream the loudest. The vast majority of Americans support President Trump rooting out waste, fraud, and abuse.”

A CNN/SSRS poll released last week found that 62% of Americans are worried that Trump’s cuts to the federal government will go too far and lead to important programs being shut down. Only 37% said they’re more worried that the cuts won’t go far enough to eliminate fraud and waste.

Remaking the IRS

Since Trump’s return, there have been a number of leadership changes at the IRS.

The Biden-appointed IRS commissioner, Danny Werfel, resigned on Inauguration Day. The acting commissioner who succeeded him retired four weeks later. The current leader, Melanie Krause has only been at the IRS for three-and-a-half years.

Trump’s nominee to be the next full-time commissioner, former GOP congressman Billy Long, hasn’t been confirmed yet.

Trump announced Long’s appointment in December. In a Truth Social post, Trump didn’t say anything about the fact that Werfel’s statutory five-year term – which is intended to give IRS commissioners some independence from the president – wasn’t set to expire until 2027.

During the transition, Werfel reached out multiple times to incoming Treasury Secretary Scott Bessent, seeking guidance on whether to resign or stay at the helm until Long was confirmed, to maintain stability amid tax season, according to a source familiar with the matter. Bessent never responded, the source said, and Werfel stepped down on January 20.

Along with reducing headcount, sources say that it appears that DOGE’s priority at the IRS has been around accessing its vast data systems.

In recent weeks, DOGE staffers have gained access to the IRS’ human resource system that houses personal information of all the agency’s employees, according to a source familiar with the matter.

While the courts weigh whether to allow DOGE to have full access to IRS data systems, the effort to remake the tax collection agency is well underway.

It began in mid-February when senior IRS staff were told DOGE would be visiting their offices. They were given just a 15-minute heads up that Gavin Kliger, a 25-year-old software engineer, was on his way.

Within minutes of arriving, Kliger demanded access to the IRS’s “tax administration systems,” according to an IRS employee familiar with the situation.

In a Bloomberg op-ed published Friday, Werfel, the former IRS commissioner, said DOGE should not have access to the sensitive data. He said it was akin the CEO of a bank walking into a branch and demanding access to all of the customers’ safe-deposit boxes.

Only a select group of IRS employees have access to the systems that house taxpayers’ sensitive financial data. Career employees informed Kliger that he could not access the agency’s IT system without undergoing extensive background checks to ensure he would not pose an insider threat.

Two weeks later, Kliger was joined at IRS by Sam Corcos, a 36-year-old startup entrepreneur, who co-founded a company that helps people customize their diet to boost their metabolism.

As soon as Corcos got there, one IRS employee told CNN, he pushed to a halt nearly all the agency’s congressionally funded programs and initiatives it was planning for fiscal year and calendar year 2025. The employee told CNN Corcos was making the demand without “fully understanding how the agency works within the federal government.”

“They’ll come in and say we’re going to delete that initiative– ‘delete’ is one of their favorite terms,” said the IRS employee. “So, we are scrambling to figure out ‘Does Sam have that authority? Does Gavin have that authority? Did Treasury give them that authority?’”

Corcos also pushed for a fast-tracked background check which would have required federal employees to work on the weekend so he could quickly gain access to the IRS IT system.

By the following Monday, the agency’s top HR officer was placed on administrative leave and told she was dismissed for being insubordinate after Kliger’s demand for an expedited background check for his DOGE partner had not been fulfilled over the weekend, sources said.

Using tax data to find immigrants

Like all of DOGE’s actions, the moves at IRS are part of the Trump administration’s broader efforts to purportedly root out fraud and abuse. But two IRS employees who spoke to CNN said that some of the actions taken by DOGE inside IRS appear to be aimed at finding ways to use the agency’s protected data to find undocumented immigrants.

The Department of Homeland Security circulated a draft memo to IRS that represented a sweeping request for information about suspected undocumented immigrants, including the home addresses of several hundred thousand individuals who paid federal taxes based on their individual taxpayer identification numbers, according to a source with direct knowledge of the document.

The memo also proposed IRS detail a dedicated group of several dozen senior IRS auditors to launch investigations into companies suspected of hiring undocumented immigrants.

Privacy experts say that would be a violation of the strict disclosure laws that the IRS operates under that prohibits the release of tax information by an IRS employee.

Two immigrant-rights groups in Chicago sued the Treasury Department and IRS earlier this month and asked a judge to block the agency from sharing taxpayers’ identifying information with US Immigration and Customs Enforcement or DHS, as Trump pushes for more deportations.

The groups claimed federal law “forbids” IRS from giving this data to immigration authorities, because ICE and DHS aren’t listed as exceptions to the confidentiality rules in the tax code.

If that does happen, lawyers for the groups wrote in filings that it would subject their members “to harm in the form of the arrest, detention, or other deprivations of liberty associated with the Trump Administration’s stated intention to engage in mass actions against immigrants.”

The case is still pending in DC federal court, and the judge hasn’t issued any rulings yet.

Though the IRS’s automated tax return systems continue to run smoothly, taxpayers in the long term may eventually experience the paralyzing effects of DOGE. Customer service wait times will likely increase as the agency loses staff. The employees CNN spoke with also expect delays with paper-based returns.

Funding from the Biden-era Inflation Reduction Act allowed the IRS to staff up to improve taxpayers’ customer service experience, including thousands of new call center representatives.

Data released by the IRS shows that wait times for customer service phone calls improved significantly from an average of 28 minutes during tax season in 2022, before the landmark legislation was passed, to four minutes in 2023, and three minutes last year.

“In many cases those long wait times ended with a courtesy disconnect,” the employee said. “They just hung up on you, so we are going back to those days.”

CNN’s Phil Mattingly, Jeanne Sahadi and Priscilla Alvarez contributed to this report.

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