Tax Collections Remain Strong in 2025 Despite IRS Concerns — Penn Wharton Budget Model

Summary: Treasury data through April 28 shows that tax receipts are broadly in line with government projections made earlier this year, before the downsizing of the IRS was announced. Receipts from tariffs have significantly exceeded projections.Key PointsRecent media reports suggested that tax receipts could fall as much as 10 percent by April 15, 2025, creating a shortfall of more than $500 billion by the end of the tax filing season.However, through April 28, individual income and payroll tax receipts are $120 billion higher than last year and statistically in line with projections made by the Congressional Budget Office (CBO) in January 2025.Receipts from customs duties (tariff revenues) have exceeded expectations by almost $15 billion following the Trump Administration’s announcements of new tariffs.IntroductionIn January 2025, the Congressional Budget Office (CBO) projected that the federal government would collect $5.2 trillion in revenue in fiscal year 2025, an increase of $245...