This tax season has the vibe of sneaking into your sister’s closet to borrow the sparkly top she says she loves, but never wears: It might be wrong, but how is she going to find out?

As the Trump administration continues to chip away at the IRS’s resources, tax professionals say they are seeing more and more filers who are willing to fudge their numbers, in hopes that the agency will be too understaffed to catch them.

On one hand, they’re kind of right. In a pivot from his first-term goals, President Trump has zeroed in on thinning out the IRS during his second term:

• The IRS started 2025 with 102,000 employees. After cuts to probationary workers (those who have been there for less than a year) and buyouts, the IRS ended the year with about 74,000.
• The White House has also snatched back nearly $54 billion of the promised $79.4 billion from the 2022 Inflation Reduction Act to enforce the tax code over the next 10 years.

Tax pros have raised concerns that defunding the IRS—especially its enforcement arm—would kneecap already declining audits of complex cases and high-income individuals.

Audits have already been declining for over a decade. Last year, the IRS completed 497,541 audits, a historic low and a huge slide from an average of 1.7 million per year from 2010–2012. Partnership audits (which inspect private equity firms) and audits of Americans making $10 million or more declined last year, too.

This could have a big impact on the US’ bottom line: While IRS budget cuts may have freed up an estimated $46 billion in federal spending over the next decade, they could also lead to a loss of $643 billion in revenue collections, according to The Budget Lab at Yale, a nonpartisan group.

How’s this year looking? Refunds are slightly up—just not as much as people anticipated. A number of new deductions from Trump’s One Big Beautiful Bill have increased the average refund check by 11% from last year to $3,462. But Americans still feel like they are paying too much.—MM

Lebanon and Israel held talks in DC. The two countries engaged in their first direct diplomatic dialogue in more than 30 years yesterday, meeting in Washington to lay the groundwork for future negotiations as Israeli strikes in Lebanon—where Iran-backed Hezbollah is based—have displaced more than 1 million civilians, per the UN. Hezbollah has said it will not abide by any agreements reached between Israel and Lebanon. Meanwhile, several Iran-linked ships appeared to pass through the Strait of Hormuz yesterday, though the US said no ships got through its blockade on Iranian ports. With a ceasefire barely holding, Iran and the US could reportedly meet for another round of in-person talks as soon as this week, and not a moment too soon: Citadel CEO Ken Griffin said yesterday that a recession is inevitable if the Strait stays closed for the next six to 12 months.

JPMorgan Chase had a champagne-worthy Q1. Revenue for the biggest bank in the US grew 10% to hit nearly $50 billion for the first three months of the year, smashing Wall Street’s expectations as market volatility and elevated dealmaking generated record hauls for big banks. JPMorgan’s trading fees hit a record high, investment banking fees rose more than those of any other global bank, and M&A advising fees surged by a whopping 82%. Still, the firm slightly revised down its full-year guidance for net-interest income, a central earnings driver. CEO Jamie Dimon said that the US economy is resilient, but “an increasingly complex set of risks” lies ahead, including “geopolitical tensions and wars” and “energy price volatility.” Elsewhere on Wall Street, strong trading also propelled Citigroup to an earnings beat, but Wells Fargo fell short of expectations.