IRS reshuffles leadership, doubles down on “digital-first,” days before filing season. The IRS will reorganize its senior leadership just ahead of the 2026 filing season, with 16 top executives reporting to IRS chief executive Frank Bisignano, a management role created by the Trump administration. Bisignano told The Washington Post the agency should lean harder into technology and efficiency, including continuing efforts to better connect internal IRS data systems and outsource scanning and digitizing paper returns. The IRS will also change how it measures call-center performance, shifting to metrics like speed to answer and call abandonment rate.
IRS operations support funds face new clawback. A bipartisan appropriations package released January 20 would rescind $11.6 billion in IRS operations support originally provided by the Inflation Reduction Act, reports Tax Notes (paywall). The cut is embedded in a four-bill appropriations minibus and would apply to fiscal year 2026, leaving the agency with about $7 billion of the ten-year $25.3 billion in operations support Congress approved. A similar rescission proposal advanced through the Senate Appropriations Committee last summer, signaling continued bipartisan interest in scaling back the agency’s long-term operational funding.
Hochul backs child care expansion while holding the line on taxes. New York Gov. Kathy Hochul (D) is proposing a $260 billion state budget that includes two years of new funding to expand child care in New York City, while resisting calls to raise personal income taxes on high earners. The plan would direct nearly $1 billion this year and $425 million next year to kick-start the program. To help offset federal cuts and support broader spending increases, the budget would also extend higher corporate tax rates on companies earning more than $5 million through fiscal year 2029, a move expected to raise about $1.6 billion a year. Even with those revenues, the state projects a $6 billion budget gap next year, rising to $12.5 billion by 2030.
Indiana advances one-year tax break for tips and overtime. Indiana lawmakers moved closer to approving a one-year income tax exemption for tips and overtime pay. The provision would apply to 2026 wages and reduce state revenue by an estimated $251 million, with the cost covered by budget surpluses. Supporters described the measure as a temporary test aligned with recent federal tax changes enacted under 2025’s One Big Beautiful Bill Act. Critics noted that the state continues to tax certain basic consumer goods, raising questions about longer-term tax priorities as lawmakers revisit the budget in 2027.
Subscribe to the Tax Policy Center’s Daily Deduction for weekday morning tax news and research. For more from TPC: Visit the Briefing Book (tax issue explainers), Fiscal Facts (quick primers), and TaxVox (researcher commentary). Track tariff developments and analysis with TPC’s Tariff Tracker. Email Renu Zaretsky with tips on research or tax news.
