Key Points
- In 2026, the IRS has moved toward greater operational stability by centralizing operations, refining enforcement and emphasizing alternative dispute resolution programs, though leadership transitions and resource constraints continue.
- Taxpayers with matters pending before IRS service centers continue to experience delays, and enforcement interactions are likely to become more targeted and increasingly limited by resource constraints.
- Early engagement, careful use of dispute resolution tools and proactive case development will remain critical for companies navigating IRS enforcement and administrative processes.
__________
In 2026, the Internal Revenue Service (IRS) has moved toward greater operational stability by centralizing operations, refining enforcement and emphasizing earlier resolution of disputes.
However, leadership transitions and resource constraints continue (see our January 13, 2026, article), and significant uncertainty remains.
IRS Leadership and Organizational Changes
Although the pace of leadership turnover has slowed since the beginning of the year, the IRS continues to operate without permanent leadership in several of its most important positions. The commissioner position remains vacant, with no nominee apparently under active consideration.
In the interim, Frank Bisignano has continued serving in the newly created role of IRS chief executive officer while simultaneously serving as commissioner of the Social Security Administration.
Leadership transitions nevertheless continue at both the Department of the Treasury and the IRS. On July 21, 2026, Ken Kies stepped down from his dual roles as Treasury assistant secretary for tax policy and acting IRS chief counsel. Treasury subsequently announced that Kevin Salinger, currently deputy assistant secretary for tax policy, would serve as both acting assistant secretary for tax policy and acting IRS chief counsel.
In addition, President Donald Trump nominated James Gadwood on June 23, 2026, to serve as IRS chief counsel following the withdrawal of Donald Korb’s nomination. Meanwhile, the IRS recently announced the end of the syndicated conservation easement settlement initiative (announced in May 2026) and its replacement with a new office that will be focused on clearing the IRS’ backlog of cases in this area.
At the same time, the IRS’ organizational structure reflects a shift toward a leaner and more centralized management model, including among the senior executive leadership team. Notably, the deputy commissioner position is no longer reflected on the public IRS organization chart, and the agency has eliminated many of the interim “acting” designations that characterized much of 2025 and early 2026.
IRS veteran Ken Corbin continues to lead Taxpayer Services, providing continuity over the agency’s taxpayer-facing operations.
On the enforcement side, Jarod Koopman now serves both as chief tax compliance officer and chief of Criminal Investigation, further consolidating oversight of compliance activities.
Not filling and/or double-encumbering executive positions falling below the senior executive ranks has continued as well, which could suggest that the IRS is intentionally evolving toward a more centralized management structure designed to operate with fewer executives who have more responsibilities, perhaps as a response to a decreasing budget.
As an example, Mabeline Baldwin was recently named the permanent commissioner of the Large Business and International Division (LB&I) but continues to act in her former role as director of Eastern Compliance in LB&I. Recent updates to LB&I’s organization chart reveal further consolidation as Cross Border Activities has been moved under Nicole Welch, who now serves as director of Treaty, Transfer Pricing and Cross Border Activities.
Whether this structure proves durable remains to be seen.
More Targeted Enforcement and Data-Driven Case Selection
The IRS has continued expanding its use of artificial intelligence (AI), advanced analytics and other data-driven tools to improve case selection and allocate examination resources more efficiently. While these technologies have been under development for several years, they are likely to assume greater importance as workforce reductions within the agency require it to do more with fewer personnel.
Taxpayers should therefore expect examinations to become increasingly targeted and informed by sophisticated data analysis.
Increased Focus on Alternative Dispute Resolution Programs
LB&I leadership has continued to emphasize efficiency through dispute resolution tools and collaborative processes.
Recent data indicates that the IRS executed fewer advance pricing agreements (APAs) in fiscal year 2025 compared with fiscal year 2024, despite continued taxpayer demand and an increase in applications. Nevertheless, LB&I leadership has continued to support the APA program as an important mechanism for providing certainty to taxpayers and the government.
The Fast Track Settlement (FTS) program, by contrast, appears to have gained momentum as LB&I and the Independent Office of Appeals (Appeals) continue to emphasize earlier resolution of disputes. LB&I FTS receipts increased 36% in fiscal year 2025 and are predicted to continue to rise.
The ability of Appeals to meet increased demand for FTS and other dispute resolution programs has been affected by staffing constraints within Appeals, with some cases stretching beyond the 120-day target. Appeals experienced significant workforce reductions, including among Appeals team case leaders who serve as mediators for FTS and Post-Appeals Mediation matters.
Both Appeals and LB&I remain committed to expanding the availability and effectiveness of FTS, and taxpayers willing to navigate current capacity limitations may find opportunities for more efficient dispute resolution.
Continued Challenges With IRS Service Functions
Taxpayers with matters pending before IRS service centers — including refund claims, responses to penalty notices, account corrections and certain tax form processing issues — continue to experience delays and difficulty reaching IRS personnel who are able to resolve issues.
These challenges have been compounded by reduced staffing levels within the Taxpayer Advocate Service and other taxpayer-facing functions. Despite taxpayer service remaining a stated priority, resource constraints continue to hinder timely resolution of administrative issues.
Potential Legislative Reforms to Improve Tax Administration
On July 30, 2026, the Senate Finance Committee advanced the bipartisan Taxpayer Assistance and Service Act, a package of more than 60 reforms aimed at improving taxpayer service and IRS administration.
Among other changes, the bill would:
- Give Appeals greater hiring authority.
- Expand procedures for refund claims and taxpayer access to Appeals.
- Modify Tax Court jurisdiction, penalty approval and electronic filing requirements.
Although the House has been advancing smaller stand-alone bills on many of the same topics, there appears to be some momentum for the Ways and Means Committee to take up a larger package in the near future.
Final Thoughts
Although the IRS continues to face significant resource constraints and challenges delivering timely taxpayer service, recent developments suggest greater operational stability. On the enforcement side, the agency is adapting through more centralized leadership, targeted enforcement, data-driven case selection and expanded use of alternative dispute resolution.
For taxpayers, IRS enforcement interactions are likely to become more targeted and increasingly shaped by resource constraints. Early engagement, careful use of dispute resolution tools and proactive case development will therefore remain critical.
This memorandum is provided by Skadden, Arps, Slate, Meagher & Flom LLP and its affiliates for educational and informational purposes only and is not intended and should not be construed as legal advice. This memorandum is considered advertising under applicable state laws.