The Man Who Ran the IRS Says the Bill for DOGE's Cuts Hasn't Come Due Yet
The IRS workforce has fallen from about 100,000 employees to an expected 74,000 by year's end after DOGE's cuts — and the man who ran the agency says the bill has not come due yet. Douglas O'Donnell spent 39 years inside the IRS, from 1986 to 2025, and ran it twice as acting commissioner. In an interview with Fortune published August 24, 2026, he laid out why the real damage lands years from now.
The Victory Lap, and the Other Side
In April, the administration took its victory lap: $2 billion cut from the IRS technology budget, "without any operational disruptions." Now comes the other side of the story. Asked what DOGE was after, O'Donnell said: "It's hard to know exactly what the objective of DOGE was." Why? Because there is, in his words, "really no strategic document that's out there." Thirty-nine years in the building — if there were a plan, he would know where it is filed.
Why the Damage Runs on a Delay
This year's filing season looked fine — the agency calls 2026 a historic, successful filing season. That is exactly O'Donnell's point. This kind of damage runs on a delay. Cut people before the replacement technology exists, and the cost lands years later. On enforcement, his words: you "cover less of it" — until nobody knows who is complying.
Meanwhile, the discretionary budget keeps falling: $12.2 billion in fiscal 2025, $11.2 billion in fiscal 2026, and $9.8 billion proposed for fiscal 2027, with Direct File on the chopping block.
What This Means for Federal Employees
If you work in the federal government, you have probably watched your own agency run this play: cuts, then a success announcement, then the people left behind carrying the difference. The gap between what agencies tell Congress and what actually happens on the ground often takes years to show — and the employees still in the building are the ones absorbing it in the meantime.
If you are at the IRS, or your agency ran the same play, the question worth asking is the one O'Donnell's interview raises: what broke first?
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