IRS Shift to Immigration Enforcement Hurts Voluntary Tax System

President Donald Trump’s plan to shift IRS criminal investigators away from tax crimes and into immigration enforcement isn’t just a bureaucratic reshuffle—it’s a direct threat to the deterrence model that underpins the voluntary tax system.

The belief that the IRS is watching and that underpayment has dire consequences is the cornerstone of voluntary compliance. It’s why tax cheats get metaphorically perp-walked through Department of Justice press releases and information campaigns, and why famous names such as Willie Nelson and Wesley Snipes become cautionary tales.

Conspicuous enforcement obscures that the actual odds of any individual taxpayer being audited remain small. The system was never designed to catch everyone—it was designed to make everyone think twice about evading. When federal priorities are publicly shifted from tax enforcement to immigration crackdowns, that illusion of scrutiny fades.

As a tax lawyer and law professor, I’ve had more people than ever lately—from students to prospective clients—ask some version of the same question: “Do I even need to bother paying taxes anymore?” It’s not always entirely sarcastic. Sometimes it’s whispered, half-jokingly half-earnestly, like they’re testing the waters.

But the frequency of the question, and who’s asking it, suggests the message is spreading. If the IRS is too busy chasing immigrants or guarding the border to chase income and guard tax revenue, maybe skipping out on taxes is a risk worth taking.

My advice to them—and to anyone reading this—is simple and consistent: Pay every dollar you owe. It’s not just your civic responsibility; it’s also a matter of basic self-preservation. Just because your return isn’t flagged the moment it’s filed doesn’t mean it won’t be later.

The IRS has years to audit, and when it does, interest and penalties can arrive dressed like the Grim Reaper. When the public starts thinking there may be no one watching the store, compliance becomes less about law and more about luck—and nerve. That’s a tough spot for a tax system built on voluntary compliance.

Willie Nelson performs on stage in Spicewood, Texas.

Photographer: Suzanne Cordeiro/AFP via Getty Images

Historically, the IRS has taken pains to cultivate deterrence. High-profile prosecutions were about sending a message as they were about collecting revenue. Willie Nelson wasn’t targeted (and made to record what amounted to a pro-tax propaganda album) because he was the most egregious tax cheat. He was targeted because everyone knew who he was. If the IRS would take down a beloved country music star, regular taxpayers contemplating evasion have no chance.

That kind of visible and conspicuous enforcement is central to the credibility of the threat of audit. Moving agents from tax crimes to immigration duties breaks this wall of deterrence in addition to changing the agency’s priorities and reducing its ability to audit returns.

There is a meta-compliance effect—the perception that the IRS catches all the tax cheats, so you should comply, just as everyone else is doing. Undermining the belief that everyone is paying their fair share, even subtly, invites a slow bleed until noncompliance becomes normalized.

It has also been argued, most notably by legal scholar Eric Posner, that paying taxes functions as a form of economic signaling that tells the marketplace, “I am a good actor in this system.” It demonstrates legitimacy to your customers, investors, regulators, and even competitors.

It’s a marker of reliability in a functioning marketplace, but that logic only holds if the norms around compliance do. If taxpayers come to see enforcement as toothless or arbitrarily redirected, the system probably won’t collapse all at once—it’ll erode, one unfiled return and normalized evasion at a time.

Such a shift in public perception can leave impacts that last well beyond the terms of a single administration. Such damage can’t be reversed by legislation or by simply declaring that IRS agents are moving back to tax duties. Trust deteriorates faster than it rebuilds, and in tax policy, perception is the foundation.

The tax system is more than just a revenue machine—it’s both a measure of how seriously the government takes the rules it writes and a reputational barometer for actors in the economic system.

Reassigning agents from tax crimes to immigration raids may seem like a simple tactical shift, but it signals that the rule of law is now selectively enforced based on whose violations are most politically useful. Once that message is out, it won’t just be tax cheats who take notice.

Andrew Leahey is a tax and technology attorney, principal at Hunter Creek Consulting, and practice professor at Drexel Kline School of Law. Follow him on Mastodon at @andrew@esq.social

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