Major IRS leak emerges days before tax filing season — what taxpayers should know

The Internal Revenue Service(IRS) is launching the 2026 tax filing season with a massive structural reorganization and the implementation of the "One Big Beautiful Bill Act" (OBBBA). Starting Monday, January 26, the agency expects to process approximately 164 million individual income tax returns. This year is particularly significant as the IRS shifts its leadership under Chief Executive Officer Frank Bisignano, who recently outlined a vision focused on modernizing customer service and tightening privacy protocols.

While the general filing window opens in late January, the IRS has already quietly begun accepting returns as of January 9 for early filers with an adjusted gross income (AGI) of $89,000 or less. This early-access phase aims to reduce the typical mid-season backlog and expedite refunds for lower-to-middle-income households. The agency is operating with a workforce of 74,000 employees who are currently adapting to a new executive hierarchy that includes high-profile figures from recent federal investigations.

With the 2026 season officially underway, taxpayers face a landscape defined by significant "no tax" incentives on common expenses and income types, marking one of the most aggressive shifts in deduction policy in recent history.

IRS leadership overhaul

The reorganization was outlined in a letter to the IRS’s 74,000 employees by Chief Executive Officer Frank Bisignano, according to reporting by the Associated Press.

The changes affect some of the agency’s most powerful divisions, including Criminal Investigation and compliance oversight.

Longtime Criminal Investigation chief Guy Ficco will retire. He will be replaced by Jarod Koopman, who will also take on the newly expanded role of chief tax compliance officer, reporting directly to the CEO.

This dual role signals a tighter alignment between enforcement strategy and agency leadership.

The reshuffle also includes Gary Shapley, who previously testified publicly about federal tax investigations and briefly served as acting IRS commissioner in 2024. Shapley will now serve as deputy chief of the Criminal Investigation division.

Another senior official, Joseph Ziegler, will transition into the role of chief of internal consulting, a position focused on operational oversight and internal controls.

Bisignano told staff he is confident the new leadership structure will allow the agency to manage enforcement priorities while delivering a smoother filing experience for taxpayers.

New tax deductions take effect for the 2026 filing season

The shakeup comes as the IRS begins administering major tax changes created by the One Big Beautiful Bill Act, which significantly alters deductions available to individuals.

One of the most impactful changes is a new $6,000 senior deduction.

Taxpayers aged 65 and older may claim the deduction, though it phases out for single filers with modified adjusted gross income above $75,000.

Married couples where both spouses are 65 or older may deduct $12,000, with the phaseout beginning at $150,000 in combined income.

The law also introduces deductions tied to earned income and borrowing costs.

Workers who regularly receive tips may now deduct up to $25,000 annually in qualified tips, including cash and charged tips shared among staff.

This benefit phases out for single filers earning over $150,000 and joint filers over $300,000.

Overtime pay also receives new treatment.

Employees can deduct the portion of overtime compensation that exceeds their standard hourly rate, such as the “half” in time-and-a-half pay.

The deduction is capped at $12,500 for individuals and $25,000 for joint filers, subject to income thresholds.

Car loan interest deduction adds complexity for filers

Another significant addition is a deduction for car loan interest, a provision expected to affect millions of middle-income households.

Taxpayers may deduct up to $10,000 in interest paid on a qualifying auto loan, provided the vehicle is for personal use and weighs under 14,000 pounds.

The loan must originate after December 31, 2024, be secured by the vehicle, and involve a car assembled in the United States.

Vehicle leases do not qualify.

The deduction phases out for single filers earning more than $100,000 and joint filers above $200,000, adding another layer of income-based calculations for returns this year.

Tax professionals warn that these new deductions, while generous, increase filing complexity and documentation requirements, especially for taxpayers claiming multiple benefits.

IRS urges early preparation and stronger identity protection

Alongside the operational changes, the IRS is urging Americans to prepare early and take steps to prevent tax-related identity theft.

The agency continues to promote its six-digit Identity Protection PIN, which blocks unauthorized returns filed using a taxpayer’s Social Security number or ITIN.

The PIN can be requested through an IRS online account, which officials recommend taxpayers review before filing.

The IRS says early preparation—reviewing new tax laws, gathering documents, and verifying account information—will be critical this year.

With leadership transitions underway and major policy changes now live, the agency is betting that preparation, not procrastination, will define a successful filing season.