Nothing says "we've got this under control" quite like a sweeping leadership overhaul mere days before you're supposed to process 164 million tax returns. That's the situation at the IRS, where chief executive officer Frank Bisignano just announced a major shake-up designed to steady an agency that's simultaneously dealing with deep staff cuts and complicated new tax rules.

Whistleblowers Move Into Top Spots

According to an Associated Press report, Bisignano sent a letter Tuesday to the IRS's roughly 74,000 remaining employees outlining the reorganization. The moves put several recognizable names into senior positions, including whistleblower Gary Shapley, who will become deputy chief of Criminal Investigation. Jarod Koopman will replace retiring CI chief Guy Ficco and also take on the role of chief tax compliance officer. Another Hunter Biden whistleblower, Joseph Ziegler, will lead internal consulting. Bisignano expressed confidence in the new lineup, stating he is "confident that with this new team in place, the IRS is well-prepared to deliver a successful tax filing season for the American public."

Doing More With Way Less

The filing season opens January 26, and the IRS expects to handle about 164 million individual income tax returns—roughly the same volume as last year. But here's the catch: they're doing it with far fewer people. The agency's FY 2024 Data Book shows employees processed more than 266 million returns and other forms, including about 161 million individual returns, while issuing 117.6 million refunds totaling nearly $491 billion. Last year's average refund came in at $3,167, and Treasury Secretary Scott Bessent has indicated that Republican tax changes should produce even larger refunds in 2026.

Those changes stem from a Trump-backed tax-and-spending package signed last summer, adding new relief for tips and overtime plus fresh deductions for qualifying older Americans. That means the IRS had to retool forms and systems right as filing season approaches—never the ideal timing.

Meanwhile, the workforce has shrunk dramatically. After buyouts and layoffs overseen by the Department of Government Efficiency, IRS staff fell from more than 102,000 employees to about 75,700, a drop of roughly 26%. National Taxpayer Advocate Erin Collins told AP that "with the IRS workforce reduced by 26% and significant tax law changes on the horizon, there are risks to next year's filing season."

Digital Push as the Solution

Bisignano, who was appointed in October and also serves as Social Security commissioner, has laid out three main priorities for 2026: improving customer service, strengthening tax collection, and safeguarding taxpayer data.

An IRS report on fiscal 2024 notes the agency has recently improved telephone and in-person service and launched a "Digital First" initiative that enabled more than 2 billion online assistance transactions. The report cautions, however, that sustained funding and staffing remain critical to maintain those gains. Translation: the digital tools are great, but you still need actual humans to make a tax agency function.