Federal cuts by the U.S. Department of Government Efficiency (DOGE) are prompting many Americans to reconsider filing their taxes this year, according to a new survey from Credit Karma.
The survey reveals that confidence is growing among taxpayers that they can evade scrutiny from the IRS following thousands of layoffs within the agency. Disclaimer: This information is not an invitation to subvert the IRS and engage in illegal behavior.
“You definitely don’t want to mess with the IRS," said Courtney Alev, a consumer financial advocate with Credit Karma. "It’s not shocking that this compounding set of stressors and anxieties is leading to some of that avoidant behavior.”
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The Credit Karma survey shows that due to DOGE cuts, 24% of Americans are less concerned about making a mistake on their tax return this year, 46% are worried they won't receive their refunds, and 17% of millennials may not file their returns at all due to a perceived lower chance of being audited. Alev emphasizes that the idea of not filing should not be taken lightly.
“You're going to potentially face penalties for failing to file, for failing to pay your bill if you owe a tax balance this year,” she said. “In addition to any penalties, and you do owe a balance, the IRS will charge you interest on any tax that you don't pay.”
Latest IRS data indicates that compared to this time last year, there have been just under 2% fewer tax returns filed and nearly 1.5% fewer processed returns. This marks the largest decrease in returns since March 18, 2022, when IRS data recorded a 5.1% decline from the previous year. An IRS spokesperson did not provide a reason for this decline when contacted by Scripps News.
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Alev advises caution, asserting that it is "always better to be safe than sorry" because "there's really no outrunning the IRS."
“The first thing you want to do is understand the options available to you like a repayment plan versus getting yourself into a situation where you might be… in a place where you need to deal with garnishment,” she added.
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