@AndyKroll
'A Tax Cut For Tax Cheats': DOGE's IRS Firings Burn Hundreds Of Millions In Revenue

'A Tax Cut For Tax Cheats': DOGE's IRS Firings Burn Hundreds Of Millions In Revenue

Dave Nershi was finalizing a report he’d worked on for months when an ominous email appeared in his inbox.

Nershi had worked as a general engineer for the Internal Revenue Service for about nine months. He was one of hundreds of specialists inside the IRS who used their technical expertise — Nershi’s background is in chemical and nuclear engineering — to audit byzantine tax returns filed by large corporations and wealthy individuals. Until recently, the IRS had a shortage of these experts, and many complex tax returns went unscrutinized. With the help of people like Nershi, the IRS could recoup millions and sometimes more than a billion dollars on a single tax return.

But on February 20, three months shy of finishing his probationary period and becoming a full-time employee, the IRS fired him. As a Navy veteran, Nershi loved working in public service and had hoped he might be spared from any mass firings. The unsigned email said he’d been fired for performance, even though he had received high marks from his manager.

As for the report he was finalizing, it would have probably recouped many times more than the low-six-figure salary he earned. The report would now go unfinished.

Nershi agreed that the federal government could be more lean and efficient, but he was befuddled by the decision to fire scores of highly skilled IRS specialists like him who, even by the logic of Elon Musk’s Department of Government Efficiency initiative, were an asset to the government. “By firing us, you’re going to cut down on how much revenue the country brings in,” Nershi said in an interview. “This was not about saving money.”

Since taking office, President Donald Trump and his billionaire top adviser Musk have launched an all-out blitz to cut costs and shrink the federal government. Trump, Musk and other administration leaders not only say the U.S. government is bloated and inefficient, but they also see it as a bastion of political opposition, calling it the “deep state.”

The strategy used by the Trump administration to reduce the size of government has been indiscriminate and far-reaching, meant to oust civil servants as fast as possible in as many agencies as possible while demoralizing the workers that remain on the job. As Russell Vought, director of the Trump White House’s Office of Management and Budget and an architect of Project 2025, put it in a speech first reported by ProPublica and Documented: “We want the bureaucrats to be traumatically affected. When they wake up in the morning, we want them to not want to go to work because they are increasingly viewed as the villains.”

One tactic used by the administration is to target probationary workers who are easier to fire because they have fewer civil service protections. Probationary, in this context, means only that the employees are new to their roles, not that they’re newbies or underperformers. ProPublica found that the latest IRS firings swept up highly skilled and experienced probationary workers who had recently joined the government or had moved to a new position from a different agency.

In late February, the Trump administration began firing more than 6,000 IRS employees. The agency has been hit especially hard, current and former employees said, because it spent 2023 preparing to hire thousands of new enforcement and customer service personnel and had only started hiring and training those workers at any scale in 2024, meaning many of those new employees were still in their probationary period. Nershi was hired as part of this wave, in the spring of last year. The boost came after Congress had underfunded the agency for much of the past decade, which led to chronic staffing shortages, dismal customer service, and plummeting audit rates, especially for taxpayers who earned $500,000 or more a year.

The administration doesn’t appear to want to stop there. It is drafting plans to cut its entire workforce in half, according to reports.

Unlike with other federal agencies, cutting the IRS means the government collects less money and finds fewer tax abuses. Economic studies have shown that for every dollar spent by the IRS, the agency returns between $5 and $12, depending on how much income the taxpayer declared. A 2024 report by the nonpartisan Government Accountability Office found that the IRS found savings of $13,000 for every additional hour spent auditing the tax returns of very wealthy taxpayers — a return on investment that “would leave Wall Street hedge fund managers drooling,” in the words of the Institute on Taxation and Economic Policy.

John Koskinen, who led the IRS from 2013 to 2017, said in an interview that the widespread cuts to the IRS make no sense if Trump and Musk genuinely care about fiscal responsibility and rooting out waste, fraud and abuse. “What I’ve never understood is if you’re interested in the deficit and curbing it, why would you cut back on the revenue side?” Koskinen said.

Neither the IRS nor the White House responded to requests for comment. Last month, Musk asked his followers on X, the platform he owns, whether they would “like @DOGE to audit the IRS,” referring to the U.S. DOGE Service team of lawyers and engineers led by him. DOGE employees have sought to gain access to IRS taxpayer data in an attempt to “shine a light on the fraud,” according to a White House spokesman.

For this story, ProPublica interviewed more than a dozen current and former IRS employees. Most of those people worked in the agency’s Large Business and International (LB&I) division, which audits companies with more than $10 million in assets and high-income individuals. Within the IRS, the LB&I division has the highest return on investment, and the widespread cuts there put in stark relief the human and financial cost of the Trump administration’s approach to slashing government functions in the name of saving money and combating waste and fraud.

According to current and former LB&I employees, the taxpayers they audited included pharmaceutical companies, oil and gas companies, construction firms and major technology corporations, as well as more obscure private corporations and high-net-worth individuals. None of the IRS employees who spoke to ProPublica would disclose specific taxpayer information, citing privacy laws.

With the recent influx in funding, employees said, the leadership of LB&I had pushed to hire not only more revenue agents and appraisers but also specialized employees such as petroleum engineers, computer scientists and experts in corporate partnerships. These employees, usually known internally as general engineers, consulted on complicated tax returns and helped determine whether taxpayers properly claimed certain credits or other tax breaks.

This work happened in cases where major companies claimed a hefty research tax credit, which is a legitimate avenue for seeking tax relief but can also be improperly used. Highly skilled appraisers have also recouped huge savings in cases involving notorious tax schemes, such as what’s known as a syndicated conservation easement — a break abused so often that both congressional Democrats and Republicans have criticized it, while the IRS has included it on its list of the “Dirty Dozen” tax scams.

“These are cases where revenue agents don't have the technical expertise,” said one IRS engineer who is still employed at the agency and who, like other IRS employees, wasn’t authorized to speak to the media. “That’s what we do. We are working on things where expertise is absolutely necessary.”

Current and former IRS employees told ProPublica that the agency had expended a huge amount of resources to recruit and train new specialists in recent years. Vanessa Rollins, an engineer in the IRS’ Chicago office who was recently fired, said probationary employees in LB&I outnumbered full-time staffers in her office. Much of her team’s work centered on training and mentorship for the waves of new employees — most of whom were recently fired. “The entire office had been oriented around bringing us in and getting us trained,” Rollins said.

These specialists said they earned higher salaries compared with many other IRS employees. But the money these specialists recouped as a result of their work was orders of magnitude greater than what they cost. The current engineer told ProPublica that they estimated their team of less than 10 people had brought in $5 billion in adjusted tax returns over the past four years. (By contrast, aWall Street Journal analysis published on February 22 found that DOGE had found savings of $2.6 billion over the next year, far less than the $55 billion claimed by DOGE itself.)

A former LB&I revenue agent added that their work didn’t always lead to the IRS recouping money from a taxpayer; sometimes, they audited a return only to find that the taxpayer was owed more money than they had expected.

“The IRS’ mission is to treat taxpayers fairly so they pay the tax they legally owe, including making sure they’re not paying any more than legally required,” the former revenue agent said.

Notwithstanding its return on investment and the sense of duty espoused by its employees, LB&I was hit especially hard by the most recent wave of firings, employees said. According to the current IRS engineer, the Trump administration appears to have eliminated the jobs of about 120 LB&I engineers out of a total of roughly 260. The person said they had heard more terminations were expected soon. The acting IRS chief and a longtime agency leader, Doug O’Donnell, announced his retirement amid the firings.

Several LB&I employees told ProPublica that the mass layoffs had been ordered from a very high level and that several layers of managers had no idea they were coming or what to expect. The cuts, employees said, did not appear to distinguish between employees with certain specialties or performance levels, but instead focused solely on whether they were on probationary status. “It didn't matter the skill set. If they were under a year, they got cut,” another current LB&I employee told ProPublica.

The current and former IRS employees said the firings and the administration’s deferred resignation offer led to situations that have wiped out decades of experience and institutional knowledge that can’t easily be replaced. Jack McCumber was an LB&I senior appraiser in Seattle who got fired about six weeks before the end of his probationary status. He said not only did he lose his job, but the veteran appraiser who was his mentor took early retirement. McCumber and his mentor often worked on syndicated conservative easement cases that could recoup tens and even hundreds of millions of dollars. “They’re pushing out the experienced people, and they’re pushing out people like me,” McCumber said. “It’s a double whammy.”

The result, employees and experts said, will mean corporations and wealthy individuals face far less scrutiny when they file their tax returns, leading to more risk-taking and less money flowing into the U.S. treasury.

“Large businesses and higher-wealth individuals are where you have the most sophisticated taxpayers and the most sophisticated tax preparers and lawyers who are attuned to pushing the envelope as much as they can,” said Koskinen, the former IRS commissioner. “When those audits stop because there isn't anybody to do them, people will say, ‘Hey, I did that last year, I'll do it again this year.’”

“When you hamstring the IRS,” Koskinen added. “it’s just a tax cut for tax cheats.”

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Reprinted with permission from ProPublica

Mike Flynn's 'Digital Soldiers' Wage Conspiracy Warfare

Mike Flynn's 'Digital Soldiers' Wage Conspiracy Warfare

The three men and three women stood with their right arms raised. Behind them the remains of the daylight hued the sky a bluish gray. As a fire danced at their feet, they gazed straight ahead at a camera recording their words. The square-jawed man in the middle, retired Lieutenant General Michael T. Flynn, spoke first. The others, including members of his family, repeated after him.

“I do solemnly swear…”

I…do solemnly swear…

“That I will support and defend…”

That I will support and defend…

“The Constitution of the United States…”

The Constitution of the United States…

The setting for this oath-taking ceremony wasn’t West Point or a U.S. military base. It looked like someone’s backyard, and instead of formal military uniforms, the six participants wore khaki shorts, hoodies, and, in the case of one woman, a white dress decorated with political catchphrases such as “crooked Hillary,” “sleepy Joe,” and “rocket man.” After they had finished reciting the Army’s oath of office, Flynn added a final line: “Where we go one, we go all.”

Where we go one, we go all!

On July 4, 2020, Flynn uploaded this video and the hashtag “#TakeTheOath” to his Twitter account and shared it with his 781,000 followers.

His video quickly went viral and triggered a wave of news coverage. Those seven words Flynn tacked onto the end of the officer’s oath — “Where we go one, we go all” — had first appeared in a mediocre 1990s movie, White Squall, starring Jeff Bridges. More recently, though, the phrase and its acronym, WWG1WGA, had become a rallying cry associated with QAnon, the bizarre conspiracy theory about a supposed cabal of pedophile elites in the Democratic Party and Hollywood who secretly run the world, while harvesting the adrenal glands of children in order to live forever. The Flynn family insisted that the oath was a family tradition having nothing to do with QAnon. (Flynn’s relatives even sued media outlets that claimed a connection.)

In the two years since that moment, what strikes me about that video isn’t the possibility of a QAnon connection, which, to be clear, the Flynn family has unequivocally denied. What stays with me is the pseudo-oath itself and what it catches about this moment in our history.

As you’ll undoubtedly recall, in 2017, Flynn briefly served as President Donald Trump’s first national security adviser, a post he held until it emerged that he had misled the FBI and Vice President Mike Pence about conversations he’d had with the Russian ambassador during the 2016 election campaign. Before that, Flynn had served as a top intelligence officer in Iraq and then Afghanistan, where he worked closely with General Stanley McChrystal who commanded American forces there in 2009 and 2010.

After that perjury scandal drove him out of the Trump administration — don’t cry for Flynn; the president would later pardon him — Flynn returned to civilian life. And yet, to hear him tell it, he never left the battlefield. Where once he had led intelligence officers and trained soldiers in the Middle East, he began speaking about a different kind of battle space. Now, Flynn talks about armies of “digital soldiers” who’ve led an “insurgency” against the political establishment not abroad but right here in America. Flynn has even trademarked the phrase “digital soldiers” and has been listed as a speaker at a Digital Soldiers Conference.

“This was not an election,” he assured the attendees of a Young Americans for Freedom conference. “This was a revolution.”

It’s become common enough to talk about all the ways our wars have “come home.” By this, however, what’s usually meant is the way the veterans of this century’s all-American conflicts continue to grapple with physical disabilities or mental trauma; or perhaps the military-grade vehicles and weaponry the Pentagon has, in these years, handed out to police departments nationwide; or even the way Pentagon budgets continue to soar while lawmakers so often have trimmed federal funding for education, health care, and other safety-net activities.

But after spending the last five years writing a book about conspiracy theories, online cultures, and the real-world harm of digital disinformation, I’ve noticed another way our forever wars have come home. America’s war-making mindset now dominates basic aspects of our domestic political landscape, transforming what once were civil disagreements into a form of partisan or ideological combat. Michael Flynn and his digital soldiers are just symptoms of a country in which members of rival parties or tribes view each other as subhuman, as nothing short of the enemy. And the online spaces where those parties increasingly meet — Facebook, Twitter, YouTube, and other social-media platforms — feel ever less like the proverbial public square and ever more like so many war zones.

In this online battlespace, victory is fleeting and defeat never final, but the casualties are all too real — of fact and truth, memory and reality. I know this because I’ve spent half a decade walking the trenches of those digital forever wars as I pieced together the story of one of their casualties. I was seeking to understand how we got here and whether there’s a way out.

His Name Was Seth Rich

In the early morning hours of July 10, 2016, 27-year-old Seth Rich was walking home from a bar in northwest Washington, D.C. He worked for the Democratic National Committee (DNC), that party’s central organizing hub, and was on the cusp of accepting a job with Hillary Clinton’s campaign and so fulfilling a childhood dream of working on a presidential run. Rich was two blocks from his house when he was shot and killed in what police believe was an attempted armed robbery.

In the months to come, however, his murder would reverberate all too eerily through Washington and across the country. It was hard not to feel grief upon learning that such a bright light had been extinguished so cruelly and suddenly. As it happened, Rich and I even had friends in common. We had played on the same weekend recreational soccer team. In fact, our biographies weren’t all that different — two Midwestern guys, him from Nebraska, me from Michigan, who had moved to Washington after college to try to leave our marks on the world, him in politics and me in journalism. When I learned about his murder, I felt a profound sadness. I also couldn’t shake a there-but-for-the-grace-of-god-go-I feeling that it could’ve been me after a late night out with friends.

Once Rich’s family had laid him to rest in his native Omaha, I expected, like so many others, that the brief frenzy of attention his death had brought would simply vanish. The nosy reporters and TV cameramen would move on to their next story. Rich’s family would receive the space they needed to grieve. They and his friends would gather to remember him on the anniversary of his death or his birthday. They’d tell stories about the head-to-toe Stars-and-Stripes outfits he sometimes wore or his obsession with The West Wing TV show. Perhaps they’d even toast his memory with pints of his favorite beer, Bell’s Two-Hearted Ale.

But that isn’t what happened. Not faintly.

As the police search for Rich’s killer or killers dragged on, a howling mob began to fill the void. Wild speculation and fantastical theories about his death started to appear online with viral hashtags — #IAmSethRich, #HisNameWasSethRich, #SethRich — while memes surfaced on political message boards leading, eventually, to elaborate conspiracy theories that would spread globally. Those theories initially originated on the far left, with claims (lacking a shred of evidence) that Rich had been killed by the Clinton family for trying to blow the whistle on or expose wrongdoing by the DNC.

And then, like a virus jumping from host to host, a new version of that conspiracy theory took a firm hold on the far right, its promoters insisting — again, without a scintilla of evidence — that Rich, not Russian-affiliated hackers (as concluded by cybersecurity experts, federal law enforcement, and the U.S. intelligence community), had hacked the DNC and stolen tens of thousands of its emails and other records, later providing those pilfered documents to the radical transparency group WikiLeaks. After WikiLeaks published those stolen DNC documents at the height of the 2016 campaign, its founder Julian Assange, in an apparent attempt to obfuscate the source of those records, dangled Rich’s name in a way that suggested he, not Russia, might have been the source.

In the hands of online commenters, political operatives like Republican dirty trickster Roger Stone, crowdfunded MAGA influencers, and primetime Fox News hosts including Sean Hannity, the story of Seth Rich’s life and death would then be warped into something altogether different: a foundational conspiracy theory for the twenty-first century.

Casualty of a Culture War

My book about the Rich saga, A Death on W Street: The Murder of Seth Rich and the Age of Conspiracy, began when I asked myself a simple question: How could that young man’s death have grown into something so vast and hideous? And what did it say about this increasingly strange country, our ever more perverse politics, and what may lie in our future? Put another way, I wanted to know how a regular guy, someone not so different from me, could become the fixation of millions, his name and face strewn across the Internet, his life story exploited and contorted until it became unrecog­nizable to those who knew him.

With time, I came to see Rich’s life and death as a genuine, if grim, parable for twenty-first-century America — a “skeleton key” potentially capable of unlocking so many doors leading toward a clearer understanding of how we ended up here. By here, of course, I mean a nation millions of whose citizens believe that the last election was stolen or fraudulent, that Covid vaccines can’t be trusted, and that only Donald Trump can defeat the secret cabal of pedophile elites and “deep state” operatives who supposedly pull all the strings in America.

As I write in my new book, we now live in

“a time when it feels like truth is what­ever the loudest and most extreme voices say it is, not where the evi­dence leads, what the data show, or what the facts reveal. A moment when people can say whatever they want about anyone else, dead or alive, famous or obscure, and in the wrong hands, that information can take on a life of its own.”

But it wasn’t until I rewatched Michael Flynn’s 2020 #TakeTheOath video that I saw the connection between America’s disastrous forever wars and its fractured political system at home.

A vicious conspiracy theory such as QAnon or Pizzagate, a dark and disturbing fiction about a supposed child-trafficking operation run by Democratic Party leaders out of a D.C. pizzeria, does more than advance some fantastical and wildly implausible claim about a group of people. It dehumanizes them. By accusing someone of the most evil acts imaginable, you rob him or her of humanity and dignity. In the simplest yet most warlike terms imaginable, you cast them as the enemy, as someone to be defeated — if not with real weapons, then with cruel tweets and deceptive videos.

And of course, there’s no shortage of evidence that digital soldiering can lead to actual violence. In December 2016, a North Carolina man who had watched Pizzagate videos online drove to that D.C. pizza joint targeted by conspiracy theories, walked inside armed with an AR-15 rifle, and fired three shots into a closet. He believed himself on a mission to save the children. Instead, he received a four-year prison sentence. And it’s only gotten worse since. The January 6, 2021, insurrection might have been the starkest evidence that Internet-fueled fantasies — in that case, of a stolen presidential election — could have grave consequences in the actual world.

The casualties of such conspiracy theories are all too real. Four Trump supporters died on January 6th during the insurrection, while multiple police officers at the Capitol that day would die in the weeks that followed. And even though Seth Rich was killed by an unknown assailant — the investigation into his homicide remains ongoing — you could say that he, too, was a casualty of our online wars. His name and memory were twisted and weaponized into something wholly unrecognizable, then harnessed for causes he would never have endorsed by people he would have been unlikely to agree with. Seth’s mother, Mary, once described to an interviewer what all this felt like to her: “Your son is murdered again and this time it’s worse than the first time. We lost his body the first time and the second time we lost his soul.”

Lay Down Your Digital Arms

What, if anything, can be done to demobilize those armies of digital soldiers? What could convince people to lay down their “arms” and treat so many of the rest of us with humanity, even if they disagreed with us?

I’ve thought a lot about such questions in the past several years. The spread of online disinformation has been deemed a crisis by experts and watchdogs — in 2020, former president Barack Obama called it “the single biggest threat to our democracy” — but what to do about it is an especially thorny question in a country with strong protections for free speech.

There are any number of ideas floating around about how to combat disinformation and conspiracy theories, while putting facts and truth back at the heart of our political system. Those include forcing Facebook, Twitter, and YouTube to rework their algorithms to deemphasize hyperbolic content and using “prebunks” before such deceptive information appears to inoculate people against it rather than having to debunk it later.

I have a few ideas of my own after spending five years on a book significantly about the conspiracy theories spreading ever more widely and wildly in our world. But let me here just offer a couple of modest suggestions for each of us in our daily lives.

The first is simple enough: Think before you post. (Or tweet, or TikTok, or whatever.) Disinformation spreads because people — and occasionally bots — spread it, sometimes on purpose, but often enough remarkably unwittingly. Before you retweet that spicy takedown tweet or share a friend’s fiery Facebook post, read it again and think twice. Check that it’s real. And take a moment to ponder whether adding your voice to a growing din of outrage is really what this world of ours needs right now.

The second suggestion is something of a throwback: Put down your devices. Talk to a neighbor. Talk to a stranger. In person. It’s a lot harder to demonize or dehumanize someone you disagree with if you meet them face to face. It’s an old-school solution to a decidedly postmodern problem. Still, it may, in the end, be the only reasonable way to defuse this fraught political moment — one where, in a distinctly over-armed country, all too many Americans are dreaming about a future civil war — and find our way back to something approaching common ground.

Copyright 2022 Andy Kroll

Andy Kroll is an investigative journalist with ProPublica based in Washington, D.C. His just-published book isA Death on W Street: The Murder of Seth Rich and the Age of Conspiracy. Follow him on Twitter at @AndyKroll and on Facebook.

Reprinted with permission from TomDispatch