Elon Musk and his Department of Government Efficiency (DOGE) ignited another controversy by requesting unprecedented access to the IRS' most sensitive data systems. That data includes Social Security numbers, bank account information, and more for millions of U.S. taxpayers.
Some privacy experts and government officials warn that granting Musk's team access to this private taxpayer data poses significant risks and raises serious concerns.
On February 17, Sens. Elizabeth Warren (Mass.), top Banking Committee Democrat, and Ron Wyden (D-Ore.), Ranking Finance Committee member, sent acting IRS Commissioner Douglass O-Donnell a letter demanding information related to the reported access request.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The White House confirmed DOGE's desire to access the IRS database, with spokesperson Harrison Fields defending the effort to reporters: “Waste, fraud, and abuse have been deeply entrenched in our broken system for far too long. It takes direct access to the system to identify and fix it,” Fields said. (Later, White House Deputy Chief of Policy Stephen Miller expressed in a Fox News interview that DOGE staff would only access IRS data on a "programmatic level.")
Meanwhile, some taxpayer and union groups have filed a lawsuit against the Trump administration, alleging that the proposed DOGE access to IRS data systems violates several laws.
The push to allow DOGE and Musk access to confidential taxpayer data, first reported by the Washington Post, coincides with the IRS facing layoffs of thousands of employees.
Additionally, the federal tax agency is without a Senate-confirmed Commissioner and is grappling with reduced funding. These challenges have ignited debate and concern about everything from privacy and government overreach to the IRS' ability to operate effectively during tax season.
What does all this mean for you and your tax information? Read on.
Related: Check out Kiplinger's tax blog for the 2025 filing season. We're providing live updates, news, information, and commentary to help you navigate your taxes.
DOGE, Musk IRS data request: 'Five alarm warning'
At the heart of the latest controversy is DOGE's request to access the IRS' Integrated Data Retrieval System (IDRS), a database containing the personal tax information of millions of people in the United States. This system includes tax returns, Social Security numbers, and other confidential data like where you live, how much you earn, and how much you owe the IRS — if you owe.
Recently, when speaking during a White House press conference about separate access for Treasury systems, Musk hinted that access was yielding personal information about some federal workers.
"We do find it rather odd that there are quite a few people in the bureaucracy who have ostensibly a salary of a few hundred thousand dollars but somehow managed to accrue tens of millions of dollars in net worth while they are in that position," Musk said, adding, "We're just curious as to where it came from.”
Regarding the IDRS request, a proposed agreement between the IRS and the Office of Personnel Management would have reportedly granted a DOGE team member a 120-day detail at the federal tax agency.
Representative Jimmy Gomez (D-Calif.), a House Ways and Means Committee member expressed concern, posting on social media platform X, "This is a five-alarm warning. The GOP majority must join Democrats to stop Musk from stealing taxpayer information. If not, they'll be to blame for any leak, abuse, or theft.”
On the issue of data privacy, Elizabeth Laird, a former state privacy officer now with the Center for Democracy and Technology, told ABC News:
"People who share their most sensitive information with the federal government do so under the understanding that not only will it be used legally, but also handled securely and in ways that minimize risks like identity theft and personal invasion, which this reporting brings into serious question."
These concerns aren't unfounded. Many may recall a tax leak beginning around 2019 involving a former IRS contractor, Charles Littlejohn, who obtained and shared confidential tax information of wealthy individuals, including Donald Trump, with prominent media outlets.
In their letter to the IRS, Wyden and Warren expressed concern about the legality of allowing such access to a DOGE member.
"For inspection of taxpayer information to be lawful, it must be made to or by an authorized person for an authorized purpose," they wrote.
The senators continued, saying: "To date, no information on DOGE employees or any others executing orders on Musk’s behalf have revealed any clear, stated purpose as to why they need access to return information, whether they have followed all required laws to gain access to IRS systems, and what steps the IRS has taken to ensure that inspection of tax return is contained to authorized personnel and not disclosed to any unauthorized parties."
DOGE access to IRS systems limited?
In a recent development, Gavin Kliger, the DOGE software engineer, was reportedly denied extensive access to sensitive IRS data systems. Instead, a compromise agreement reported by The Washington Post and Reuters allows Kliger a temporary assignment at the IRS but explicitly prohibits him from accessing individual tax returns or personally identifiable information.
The understanding is that if access to IRS systems becomes necessary for his work, Kliger will only be provided with anonymized data that cannot be linked to specific taxpayers.
This is a fast-moving story, so it's unclear at this time how this agreement will play out.
IRS layoffs?
Compounding the situation, IRS employees are experiencing a workforce reduction, with thousands of employees being laid off as of last week.
- This move is part of a broader federal government restructuring effort led by President Trump's administration and DOGE.
- The layoffs are expected to target probationary employees who have been with the agency for less than two years.
- Those workers don’t have the job protections that longer-serving staff have.
The timing of these firings, coinciding with the ongoing tax filing season, raises concerns about the IRS' ability to function effectively. (The Biden administration had increased IRS staffing levels with funding from the Inflation Reduction Act to improve agency modernization, customer service, and tax enforcement focused on wealthy nonfilers and large corporations.)
Additionally, the layoffs layer on a Trump administration hiring freeze (indefinite regarding the IRS) and a federal buyout offer program that some IRS workers cannot elect until the 2025 tax filing season ends.
DOGE tax refund and other IRS impacts
DOGE's data access request raised significant questions about individual privacy that will hopefully be mitigated by the reported limited access to IRS systems. Still, some wonder how the IRS will protect taxpayer data with a reduced workforce. What safeguards will be in place to prevent potential misuse of sensitive tax information by DOGE or other individuals or entities?
The situation also raises several practical issues regarding IRS operations.
Delayed Refunds: With fewer staff and potential disruptions from the DOGE interventions, tax refunds could take longer to process.
Reduced Services: Layoffs could lead to longer wait times for customer service and fewer resources for taxpayer assistance.
Potential for Errors: A reduced workforce during peak tax season could increase the likelihood of processing errors and delays.
Wyden and Warren echoed some potential refund impacts in their letter:
"We are also extremely concerned that DOGE personnel meddling with IRS systems in the middle of tax filing season could, inadvertently or otherwise, cause breakdowns that may delay the issuance of tax refunds indefinitely. Any delay in refunds could be financially devastating to millions of Americans who plan their budgets around timely refunds every spring," they wrote.
DOGE IRS access: What's next?
As of February 21, 2025, in what is a developing story, DOGE hadn't been granted access to the IRS files. Instead, as mentioned, more limited access was arranged.
Meanwhile, Bloomberg and several other outlets report that the Center for Taxpayer Rights, Main Street Alliance, the National Federation of Federal Employees, and Communications Workers of America, AFL-CIO filed a lawsuit in federal court. That suit alleges that the proposed DOGE access to IRS data violates several laws. So, the situation remains fluid.
Whatever happens, the outcome of this controversy could change private sector involvement in government operations and individual privacy protections in the near future. Stay tuned for developments.
This story has been updated to mention the proposed limited DOGE access to IRS systems.
Related
-
A Savings Tool to Empower People With DisabilitiesAn ABLE account can improve quality of life for individuals with a disability — it permits tax-free saving for ongoing expenses without jeopardizing benefits.
-
401(k) Spousal Consent: Lawmakers Reintroduce LegislationThe Women's Retirement Protection Act (WRPA) would prevent spouses from raiding their partners' 401(k) accounts.
