> Fewer people working means fewer people paying income tax
> Fewer people working does mean fewer people filing taxes.
> Level of fraud is immaterial to that point.
Fewer people filing does not equal less work. They still have to calculate and decide to try to collect from non-filers and when to schedule that based on a predictive model paired with an existing workload. Which is easier, figuring out if your W2s match up with employers who have turned in theirs, or figuring out what you didn't claim (if there was something you omitted)? You really think the IRS doesn't care if you didn't make any money AT all for a year? You are required to file or the IRS takes additional action. Welcome to America. People who do not have legitimate incomes also tend to rise, which then lends to more fraud and more work to understand who misused who's social security numbers (sometimes random, sometimes stolen as mine has been) or who work for whom and what the record should reflect to produce the proper accountability for you as an individual. This includes fines, of course. I have seen it take about 5-7 years to catch up. Talk to a tax preparer or something before you see a fine for a few thousand dollars when you do get an income. Sometimes they are efficient enough to wait till you have money to try to do a takeback.