IRS Reorganization 2026 Brings Structural Overhaul Before Filing Season Begins

The note that Frank Bisignano sent to the IRS employees came through a long-closed office door like a rush of wind. The IRS reorganization was disclosed just five days before filing season, which felt remarkably planned in a year already marked by changes to tax laws and a smaller federal workforce. However, the urgency wasn’t the only thing that set it apart. Every change—stronger data integration, fewer silos, and a long-overdue shift toward a digital-first strategy—was motivated by this clear goal.

Addressed to the remaining 74,000 employees of the agency, the memo established an unusually straightforward tone. In order to stabilize and expedite the agency’s service delivery, sixteen top leadership positions were reorganized and important individuals were brought in. The deputy chief of Criminal Investigations was Gary Shapley, who was well-known for his whistleblower during the Hunter Biden case. Another well-known figure from that story, Joseph Ziegler, was named head of internal consulting. Not only were both selections politically significant, but they also represented a return to authority in areas where oversight had lately lapsed.

Longtime IRS enforcement veteran Jarod Koopman was appointed chief tax compliance officer and head of the Criminal Investigation section. This dual role indicates a structure that is being flattened for quicker decision-making and is especially uncommon in an organization that has traditionally relied on compartmentalization. This shape is more appropriate for technology than for custom.

The IRS is getting ready to process some 164 million individual tax returns when the reorganization takes place. The infrastructure handling that number is exceptional, but the number itself is not. The agency is now expected to do more with less after cutting 26% of its workforce in 2025 in accordance with the Department of Government Efficiency’s recommendations. That is a common theme in governance, but in this instance, the change might be very advantageous.

The IRS is proactively working to alleviate systemic bottlenecks by giving automation, digitization, and collaborations with external processors for paper returns top priority. If these new methods stand up under pressure, they could drastically cut the paper-to-portal backlog that used to reach late summer.

Here, Bisignano’s leadership style—developed over decades in the tech and banking sectors—is becoming apparent. He seems to be adopting agile startup approaches—rapid restructuring, iterative system design, and direct accountability—instead of adhering to conventional government playbooks.

An excellent example is the agency’s dashboard overhaul. A newly built online platform that enables taxpayers to track refunds, upload documents, and settle notices through a single interface was soft-launched by the IRS in recent days. Compared to its predecessor, this new interface is far faster and much more user-friendly. The IRS intends to lower contact center volume, which resulted in excruciatingly long wait times last year, by simplifying access.

I recall calling the IRS for a routine update during the 2025 filing season and hearing the well-known wait music for more than 45 minutes. It made an impact not just on the quality of the service but also on how outdated the entire procedure seemed.

Already, this year feels different. Timelines for refunds are anticipated to become more stringent. The response procedures for files that have been highlighted have been revised. Significantly, proactive communication via automated notifications and status alerts is being promoted. It used to be impossible for an agency this large to have operational transparency like that.

Naturally, security concerns have been voiced by detractors, especially in relation to the agency’s choice to contract out parts of return processing to outside parties. The worry has some validity in light of the growing hazards posed by the internet. However, the agency maintains stringent federal compliance requirements, and for the time being at least, the efficiency savings might outweigh the perceived risk.

Another level of complexity is added by the 2026 tax code amendments that were passed as part of President Trump’s most recent omnibus package. Both taxpayers and preparers must navigate uncharted territory due to new deductions for seniors, credits for tipped workers, and updated overtime regulations. For its part, the IRS claims to be prepared, supported by what it refers to as a “smart compliance framework” that use linked data and predictive algorithms to identify mistakes or questionable conduct faster than in the past.

In actuality, this implies that taxpayers who file electronically could view demands for documentation or error flags almost instantly. If properly implemented, this method has the potential to significantly reduce refund delays and increase compliance.

Some employees of the agency have called the changes “long overdue” and “energizing,” while others are naturally apprehensive as they acclimate to new management in the face of persistent budget and personnel uncertainties. That positivity is crucial. Morale frequently lags behind structural improvement, particularly in positions involving public service. However, preliminary indications point to a cultural change occurring concurrently with the organizational one.

The 2026 season might not seem revolutionary to the American taxpayer, but it will probably be a significant improvement. Small but significant victories include quicker reimbursements, more transparent dashboards, and improved communication. Furthermore, the promise of a government organization that develops, learns, and adapts is compelling.

If this new IRS organization weathers the storm of April deadlines, only time will tell. At the very least, though, it represents a departure from routine—a rare and essential change in an organization that has up to now been more reactive than responsive.