Key Takeaways
- •Frank J. Bisignano (Chief Executive Officer, Internal Revenue Service) announced that prior-year adoption tax credit carryforwards will be refundable up to $5,000 for the 2025 tax year.
- •Bisignano testified that the IRS is transforming through private-sector technology practices, reducing amended return processing times from 16 weeks to less than seven days.
- •Rep. Thompson (D, CA-4) and Rep. Sánchez (D, CA-38) pressed Bisignano on 42,695 illegal taxpayer data disclosures to immigration officials, which he declined to discuss citing litigation.
- •Republicans praised the Working Families Tax Cuts for boosting refunds, while Democrats criticized the administration for terminating union contracts and eliminating the free Direct File program.
- •The IRS will continue its digital transformation toward "straight-through processing" for the 2027 season while facing ongoing Inspector General investigations into unauthorized taxpayer data disclosures.
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Hearing Analysis
Key Testimony
The House Ways and Means Committee held a hearing on March 4, 2026, to review the progress of the 2026 tax filing season and the Internal Revenue Service’s (IRS) implementation of the Working Families Tax Cuts Act. The hearing featured testimony from the Honorable Frank J. Bisignano, the first-ever Chief Executive Officer of the IRS. The session served as a progress report on the current filing season and a platform for the Trump administration to highlight its tax policy priorities, including the permanency of several Tax Cuts and Jobs Act (TCJA) provisions and the introduction of new tax exemptions for working-class Americans.
Chairman Jason Smith (R, MO-8) opened the hearing by highlighting the success of the current filing season, noting that average refunds are 10 percent higher than the previous year. He attributed this to the Working Families Tax Cuts, which include the elimination of federal taxes on tips, overtime pay, Social Security benefits, and auto loan interest for American-made cars. CEO Bisignano, drawing on his extensive private-sector experience at Fiserv and JPMorgan, testified that the IRS is undergoing a "transformation" rather than mere modernization. He reported that as of March 2, the IRS had processed over 55 million returns and issued $137 billion in refunds. He emphasized the use of "straight-through processing" and a digital-first approach to reduce amended return wait times from 16 weeks to one week.
Overview
A major policy announcement during the hearing concerned the adoption tax credit. In response to questioning from Chairman Smith, Bisignano announced that for the 2025 tax year, carry-forward amounts of the adoption credit are refundable up to $5,000 per child. This change is intended to make adoption more accessible to working-class families regardless of income. Bisignano also highlighted the rollout of "Trump accounts," a new retirement savings vehicle for children, noting that the agency has already received over 2 million Form 4547 filings.
The hearing was marked by sharp partisan disagreement regarding agency management and taxpayer privacy. Ranking Member Richard Neal (D, MA-1) and other Democrats criticized the administration for what they termed a "war on the IRS." They specifically targeted the termination of the National Treasury Employees Union (NTEU) contract and the cancellation of the Direct File pilot program. Rep. Judy Chu (D, CA-28) argued that ending Direct File benefited large tax preparation companies like Intuit and H&R Block at the expense of taxpayers who now face fees for services that were previously free.
Organizations & Entities
Significant time was devoted to allegations of illegal data sharing. Rep. Mike Thompson (D, CA-4) and Rep. Linda Sánchez (D, CA-38) cited court findings that the IRS violated federal law 42,695 times by sharing confidential taxpayer information with Immigration and Customs Enforcement (ICE) and the Department of Homeland Security (DHS). Bisignano declined to comment on the specifics, citing ongoing litigation, but maintained that the agency follows statutory requirements for data sharing and has implemented a new risk management function reporting directly to his office.
Rep. David Schweikert (R, AZ-1) pushed for more aggressive technological adoption, urging the IRS to move to encrypted cloud servers and utilize advanced AI for taxpayer assistance. Bisignano agreed, stating that technology is the "great enabler" for increasing compliance and simplifying the filing process. He noted that visits to IRS.gov have increased 43 percent, reducing the burden on phone services.
Overview
Organizations identified in the transcript were discussed in the following contexts: - Internal Revenue Service (IRS): The central subject, discussed regarding its leadership transition to a CEO model and its operational efficiency under the Trump administration. - Department of the Treasury: Mentioned as the oversight body, with Secretary Scott Bessent noted for his role in implementing the administration's growth agenda. - National Treasury Employees Union (NTEU): Discussed regarding the termination of its contract, which Democrats criticized as an attack on worker rights and Republicans defended as unnecessary due to existing federal statutes. - Immigration and Customs Enforcement (ICE) and Department of Homeland Security (DHS): Criticized by Democrats for receiving unauthorized taxpayer data for immigration enforcement purposes. - Intuit and H&R Block: Referenced as private entities that benefit from the elimination of the Direct File program. - Social Security Administration (SSA): Mentioned because Bisignano also serves as its Commissioner, leading to questions about potential union contract terminations at that agency.
The hearing concluded with requests for additional data, including state-by-state information on delayed refunds and copies of the CP53E notices sent to taxpayers who did not provide bank account information. Bisignano committed to continuing the agency's digital transformation to ensure the 2027 filing season is even more efficient.
Transcript
The committee will come to order. Good morning, I want to welcome the IRS CEO Bisignano to the Ways and Means Committee. We look forward to having you back to discuss your great work as commissioner of the Social Security Administration soon as well. Thank you for being here with at least from the IRS's hat today. Under President Trump, the IRS is putting the American taxpayer first and supporting working families. Look no further than this tax filing season, which shows how the promise of the working families tax cuts we enacted last year is becoming reality. Americans are getting bigger refunds that put more money back into their pockets. Average tax refunds amounts are 10 percent higher this filing season than last. No tax on tips, no tax on overtime, no tax on Social Security, no tax on auto loan interest for cars made in the USA. Trump accounts a larger child tax credit, a boosted standard deduction. These tax cuts are making life more affordable for working families. Let's take a family of four with two kids. A family like this making up to $73,000 would owe nothing, would owe zero to the federal government thanks to the working families tax cuts. That same family can also expect to have up to $10,900 more in take-home pay. That is real money that helps people get ahead. Republicans secured more than 7 million jobs, and we're already seeing higher than projected economic growth thanks to these pro-growth tax cuts. Just in the past week, traveling through Southeast Missouri, I heard directly from a young lady who's a waitress who had a record refund of nearly $12,000 because of all the different provisions within the Tax Cut and Jobs Act. That $12,000, Commissioner, is her year-long's rent and also her grocery bills. This makes a different from people who are just living from paycheck to paycheck trying to put food on their table, clothes on their backs, and gasoline in their cars. The IRS is where the rubber meets the road for delivering this tax relief. It is vital that the IRS must deliver timely refunds. This money, a direct result of the working families tax cuts, will make a difference for millions of hardworking Americans: waitresses, linemen, seniors, welders, farmers, and small business owners just to name a few. We look forward to hearing what the IRS is doing to quickly issue refunds, and we will continue to engage with the agency to deliver relief to working families. This committee also has a duty to ensure that our tax code is not exploited by bad actors. That is why we are conducting an investigation into tax-exempt groups whose activities potentially violate their tax-exempt status. Our investigation has uncovered organizations operating in the United States who push Chinese propaganda. They incite violent protest and riots, facilitate foreign interference in our elections, and support terrorism. Tax-exempt status is a privilege, not a right. On behalf of the American people, we will fight to ensure this privilege is not abused. The agency must work to ensure our tax code is not weaponized against the American people to carry out the agenda of foreign actors. As the IRS carries out President Trump's agenda, it is also using modern technology to become faster, leaner, and more efficient. That work complements the bipartisan legislation passed out of this committee including four tax administration bills that have now become law to make tax filing easier and more fair for Americans. The modernized technology being implemented under your leadership stands in stark contrast the approach of the Biden administration's IRS. When they had complete control of Washington, Democrats handed the IRS an $80 billion check to hire 87,000 new IRS agents whose purpose we uncovered in this committee was to in fact audit more middle-class families and small businesses. They gave the IRS the power to snoop on the Venmo or Cash App transactions of Americans buying a couch from their neighbor or paying a neighborhood kid to mow the lawn. This was the wrong approach then, and thanks to this committee's actions, taxpayers can breathe a little easier after the largest tax cut in American history. I want to thank you for coming to testify about the IRS's progress to better serve taxpayers, the successful filing season, and how you are ensuring Americans get their money back in their pockets faster. I'm pleased to recognize the ranking member, Mr. Neal, for his opening statement.
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