IRS Corrects Financial Statements to Include Costs of DOGE Cuts

The cost of employees who were kept on the IRS’s payroll as part of the Department of Government Efficiency’s buyout offers wasn’t properly documented in the agency’s financial statements, a watchdog found.

Nonproduction costs, which include severance payments and separation incentives, increased significantly in 2025 with the exodus of about 25% of the agency’s workforce, according to a Government Accountability Office report Thursday.

These employees were kept on the payroll in many cases for months while not working.

The IRS didn’t correctly report nonproduction costs on the draft financial statements, though it has since corrected it, the watchdog said. The ...