IRS Chief Overhauls Agency Operations Days Before Jan 26 Filing Start
Less than a week before the 2026 tax filing season begins, the IRS has announced a major leadership reorganization.
In a letter sent to the agency’s roughly 74,000 employees on Tuesday, January 20, IRS head Frank Bisignano outlined changes to the agency’s executive structure, aimed at modernizing operations and improving efficiency.
The shake-up includes the promotion of Gary Shapley to deputy chief of Criminal Investigation and the appointment of Joseph Ziegler to a newly created internal consulting role focused on operational improvements and technology.
For Americans living abroad, these changes are more than just bureaucratic musical chairs. The move toward a “digital-first” IRS, coupled with a 26% reduction in total staff, means the 2026 filing experience could look and feel very different for those with complex international tax obligations.
The Big Changes
The announcement outlined three major shifts in leadership structure and operational priorities.
- New Leadership Style: The IRS is integrating private-sector management practices into a traditionally government-run agency. Bisignano, who comes from the private sector, now leads day-to-day operations as the agency’s chief executive. He is the first IRS leader to hold the title “CEO,” a role created by the current administration.
- Dual Leadership Across Federal Agencies: Bisignano is also head of the Social Security Administration, placing oversight of two major federal agencies under a single leader. Together, the IRS and SSA are responsible for collecting roughly $5 trillion in annual tax revenue and distributing about $1.5 trillion in benefits.
- Modernization Through Technology: The IRS is expanding its use of automation and digital tools as part of a broader effort to modernize tax processing and improve taxpayer services, according to agency officials.
Navigate 2026 IRS Changes with a Proven Strategy
The “CEO” Model: A New IRS Leadership Structure
The most significant aspect of this IRS leadership reorganization in 2026 is that, for the first time, it’s being run by a Chief Executive Officer.
- Dual-Agency Control: Frank Bisignano is managing both the IRS and the Social Security Administration simultaneously. He is prioritizing “efficiency through technology” to manage the $6.5 trillion flowing through both agencies.
- Senior Leadership Appointments: As part of the reorganization, the IRS announced several high-profile leadership appointments. Gary Shapley was elevated to deputy chief of Criminal Investigation, and Joseph Ziegler was named to a newly created internal consulting role. The agency has said these changes are intended to strengthen oversight, operational effectiveness, and modernization efforts.
Digital-First Operations: Expanded Use of Automation
As the IRS prepares for the 2026 filing season, it is increasing its use of automation and digital tools as part of a broader effort to modernize tax processing and improve taxpayer services. The shift comes amid a significant workforce decline: the agency’s headcount fell by roughly 26% between the start of the 2025 filing season and mid-2025.
Increased Digitization of Paper Returns
Under current operations, paper-filed tax returns (including those mailed from abroad) are increasingly scanned and converted into digital files early in the processing workflow. This digitization is often performed by third-party contractors before the returns enter IRS systems for review. Read more on the IRS’s plan to phase out paper checks.
Greater Reliance on Automated and Self-Service Tools
The IRS is expanding the use of automated systems and online tools to handle routine tasks, provide status updates, and resolve common taxpayer questions. Agency officials have said these tools are intended to supplement traditional services as part of broader modernization efforts.
Updated Measures of Taxpayer Service
The agency has also adjusted how it evaluates taxpayer service performance. In addition to historical measures, the IRS now places greater emphasis on metrics such as average speed of answer, reflecting responsiveness across phone, digital, and automated channels.
Data Privacy and International Oversight
For taxpayers living abroad and for immigrant communities, the IRS reorganization coincides with renewed attention to how taxpayer data is accessed, analyzed, and shared across government systems.
Expanded Use of Integrated Data Systems
The IRS has said it is working to better integrate internal data systems to improve efficiency, reduce processing delays, and strengthen compliance efforts. These initiatives are intended to enable the agency to use information already held more effectively across programs, rather than relying on manual or duplicative processes.
Limits on Data Sharing With Other Agencies
The administration has explored expanded data-sharing arrangements between the IRS and other federal agencies, including the Department of Homeland Security. However, a federal court recently blocked a proposal that would have allowed broader sharing of sensitive taxpayer information, reaffirming existing legal restrictions on the use of tax data outside the IRS.
Use of Advanced Analytics in Compliance Efforts
The IRS continues to expand the use of advanced analytics, including automated and AI-assisted tools, to identify potential noncompliance and fraud. These tools are used across a range of programs, including reviews of refundable credits such as the Child Tax Credit, where eligibility rules can vary for taxpayers living outside the United States.
Proactive Compliance for the Modern Expat
2026 Quick Reference for International Filers
| Feature | Old Standard | 2026 Change |
| Filing Opens | Varies | January 26, 2026 |
| Paper Returns | Processed by IRS staff | Scanned/Digitized by Private Contractors |
| FEIE Amount | $130,000 (2025) | $132,900 (for 2026 tax year) |
| Support | Human-centric help lines | Digital-first / “Average speed” metrics |
| Data Security | Strictly siloed within IRS | Increasing “anonymized” access for other agencies |
What This Means for You
1. Electronic Filing Is Increasingly Important
As the IRS expands digital processing, electronic filing remains the most direct way to submit returns and reduce processing delays associated with paper filings.
2. Customer Service Constraints Are Likely to Continue
With fewer staff and greater reliance on automated systems, taxpayers may continue to face challenges reaching live assistance, particularly for complex issues such as foreign income exclusions, international reporting requirements, and cross-border compliance questions.
3. Greater Use of Automated Compliance Notices
The IRS is expanding the use of automated systems and analytics to identify potential errors or inconsistencies. This has led to continued use of computer-generated notices and preliminary compliance letters, which taxpayers may receive even when issues can ultimately be resolved without enforcement action.
For a breakdown of the actual numbers and rates, see our Guide to the 2026 Expat Tax Changes.
Looking Ahead
The 2026 filing season opens January 26 with the IRS operating under a new leadership structure, a smaller workforce, and an increased emphasis on digital processing. Agency officials have said technology will play a larger role in administration and compliance as these changes take effect.
For taxpayers living abroad and others with complex filing obligations, the shift toward automation underscores the importance of careful documentation, timely responses to IRS notices, and proactive planning. As the IRS continues its transition toward digital-first operations, navigating the filing process may require closer attention to accuracy, deadlines, and evolving administrative procedures.
Expert Oversight for an Automated Era
