IRS Enforcement, Audit Pullback Seen Hitting State Coffers

State revenue officials are facing new hurdles in collecting taxes and running audits as the Trump administration’s IRS job cuts and a pullback from tax enforcement ripples downstream.

States lean on data-sharing with the federal agency as it processes tax returns and roots out fraud to help inform their own activities, four state tax officials said Tuesday at New York University’s Institute on State and Local Taxation. Now, faced with a dramatic shift in IRS priorities, states are watching the filing season and upcoming audit cycles for clues on where they may have to adjust their own, said the officials ...