State Tax Agencies Brace for Downstream Impact of IRS Cuts

State tax agencies are paying attention as the Trump administration slashes IRS staff and throws agency priorities into limbo, because the trickle-down can change their work and even their revenue.

“If IRS is left with diminished capacity, there will be downstream effects that the states will be dealing with,” said Greg Matson, executive director of the Multistate Tax Commission, which coordinates tax harmony and enforcement activities across the states.

“I wouldn’t expect that to happen in the short term, though, just given the natural cycle of tax filing and administration,” he said. “But it wouldn’t take long.”

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