Treasury Secretary Scott Bessent is extending his oversight of the Internal Revenue Service (IRS) in a notable, albeit temporary, move that sees him retaining the agency’s top position. This development coincides with the appointment of Frank Bisignano, currently the Commissioner of the Social Security Administration, to the newly created role of Chief Executive Officer (CEO) of the IRS. These shifts occur amidst broader federal government uncertainties, including a looming potential government shutdown that could significantly impact IRS staffing levels.
The decision for Secretary Bessent to serve as Acting Commissioner, following the removal of Billy Long by President Donald Trump earlier this year, marks an unusual instance of a Treasury Secretary directly leading the tax collection agency. While intended as a short-term measure, this arrangement has prompted discussions regarding the agency’s operational independence and the potential for political influence. Bisignano’s appointment as CEO, reporting directly to Bessent, is designed to streamline day-to-day operations and enhance focus on key areas such as collections, privacy, and customer service. Bisignano’s extensive background in financial services, including leadership roles at J.P. Morgan Chase and Citigroup, is expected to bring valuable executive experience to the IRS.
Beyond these leadership changes, the IRS faces the immediate challenge of potential workforce reductions due to a government shutdown. The agency has indicated that if funding lapses extend beyond five business days, it may furlough approximately 35,000 employees. This would leave roughly 40,000 staff members operational, focusing on essential functions such as tax filing activities, legislative implementation, and IT modernization. Such contingency plans echo those enacted during previous government shutdowns in 2018 and 2019, highlighting the recurring vulnerability of federal agencies to budget impasses. The IRS had initially planned to sustain normal operations for the first five days of a shutdown by utilizing funds allocated under the 2022 tax-and-climate law.
The IRS’s operational continuity is further complicated by its ongoing efforts to implement President Trump’s significant tax and spending legislation, particularly in the lead-up to the October 15 deadline for tax filings with extensions. Industry groups, such as the American Institute of CPAs, have urged the agency to maintain its full workforce during any shutdown. They argue that a reduced IRS staff, combined with the pressure of tax filing deadlines, could exacerbate stress for taxpayers, corporations, and tax advisors.
Michael Zhang is a seasoned finance journalist with a background in macroeconomic analysis and stock market reporting. He breaks down economic data into easy-to-understand insights that help you navigate today’s financial landscape.