Right before the U.S. tax filing season officially opened on January 26, the Internal Revenue Service announced significant leadership changes that have drawn cautious scrutiny from tax professionals. Practitioners with the high-net-worth clients and those who assist Americans living abroad are paying close attention. While IRS leadership transitions regularly occur, the timing and substance of the new changes indicate something new and important in the IRS’ enforcement strategy, especially in the international tax space and cases involving digital-assets compliance.
When I read about the changes at IRS, decades of experience told me this is not just internal housekeeping. It could reshape how quickly an IRS civil inquiry turns more serious. For Americans abroad, foreign families with U.S. persons, and dual nationals who face bigger challenges with FBARs, FATCA, and offshore assets, this change warrants a careful look.
The IRS New Model
Frank Bisignano plays a pivotal role in this shift at the IRS. Mr Bisignano assumed the newly created position of IRS Chief Executive Officer in October 2025 while he continued to serve concurrently as Commissioner of the Social Security Administration. This is a unique dual role designed to improve operational efficiency and coordination between the two agencies.
In January 2026, Mr. Bisignano announced a broad internal reorganization aimed at stabilizing IRS operations ahead of filing season. This is in response to IRS staffing losses, unprocessed tax return backlogs and training and tech delays which have caused concern for the agency’s preparedness for the 2026 tax filing season. Concern had been expressed not only by tax professionals but also the Treasury Inspector General for Tax Administration, the official government watchdog.
Part and parcel of the restructuring announced by Mr. Bisignano is a move set to centralize decision making by implementing direct reporting lines to the CEO. Looked at from an enforcement perspective, these changes should increase accountability, speed, and coordination. All of these factors can have a strong impact on how tax compliance issues are identified and escalated.
Civil and Criminal Enforcement Now Join Hands
Part of the change in IRS structure was the retirement of Guy Ficco as Chief of the IRS Criminal Investigation Division and the appointment of Jarod Koopman to lead it. Mr. Koopman had already been serving as Acting Chief Tax Compliance Officer since October 2025. With the new structure, he now assumes responsibility for both civil compliance functions and criminal investigations.
In addition to CI, Mr. Koopman oversees the Large Business and International division. LB&I handles audits of multinational corporations, complex partnerships, and high-net-worth individuals, many of whom have significant international holdings. Mr. Koopman has an extensive history with CI; additionally he brings years of experience in cybercrime, cryptocurrency tracing, and forensic analysis.
Placing both civil audit functions and criminal enforcement under a single leader with a robust investigative background has prompted discussion within the tax community. The IRS civil and criminal divisions traditionally operated with clearer separation. This new IRS organizational development raises the possibility that information uncovered in civil audits, particularly those involving offshore structures or digital assets could move more quickly toward criminal referral when willfulness is suspected.
Americans Abroad and Globally Mobile Taxpayers
For U.S. citizens and green-card holders living overseas, U.S. tax obligations are complicated. They follow the taxpayer, regardless of residence. Worldwide income remains fully taxable, and compliance hinges on extensive information reporting, including FBAR (FinCEN Form 114) for foreign financial accounts that exceed $10,000 in aggregate in any calendar year, Form 8938 under FATCA covering a wide variety of so-called specified foreign financial assets and detailed information returns for foreign corporations, partnerships, trusts, gifts, and inheritances.
Mr. Koopman’s strong background in complex financial investigations and forensics, combined with his oversight of LB&I, could mean a more intense focus on sophisticated issues (e.g., undisclosed offshore accounts, opaque ownership structures, and offshore crypto holdings). The IRS’ increased use of artificial intelligence, data analytics, and automated FATCA matching means discrepancies are easier to detect.
Heightened Scrutiny of Expatriation Planning
For those considering expatriation, whether by renouncing U.S. citizenship or abandoning long-term green-card status, my earlier articles explain that many surprises are often in store, including a possible loss of Social Security benefits. With the IRS restructuring, the importance of careful, well-documented pre-expatriation tax planning is further underscored.
The expatriation tax regime under Internal Revenue Code Section 877A generally imposes an exit tax on the untaxed gain on worldwide assets. It applies to “covered expatriates,” generally defined as an individual who meets any of three tests: the individual has a net worth of $2 million or more on the expatriation date; or has an average annual U.S. income tax liability over the five-year period prior to expatriation that exceeds an inflation-adjusted threshold (e.g., $211,000 for 2026); or the individual fails to certify full U.S. tax compliance for the five years preceding expatriation.
Pre-expatriation strategies aimed at reducing net worth below the $2 million threshold, such as making gifts to family members, are certainly not prohibited, but they are drawing closer IRS scrutiny. Recent revisions to Form 8854, required of everyone who expatriates, now require an explanatory statement for significant changes in assets or liabilities during the five-year lookback period. This enhanced disclosure requirement gives the IRS greater visibility into transactions designed to reduce net worth or reposition assets prior to expatriation.
With the IRS unified civil-criminal enforcement structure, aggressive or artificial net-worth reduction strategies could escalate faster (while many cases remain civil), especially in high-net-worth international cases. Tax planning in preparation for expatriation should be done, but it must be grounded in substance, documentation, and compliance.
Case Hypothetical
A U.S. citizen who has lived abroad for many years operates a business through a foreign company and maintains several non-U.S. financial accounts. Although U.S. income tax returns were filed, FBARs and Forms 8938 were not submitted in earlier years, based on the taxpayer’s misunderstanding of how foreign corporate accounts and offshore crypto activity are treated for U.S. tax reporting purposes.
When the taxpayer later decides to renounce U.S. citizenship, a tax advisor explains that Form 8854 cannot be signed without first correcting all prior noncompliance, including amending returns to report omitted income and fully disclosing reportable crypto transactions. Under time pressure to complete the expatriation, the taxpayer files delinquent FBARs and Forms 8938 but does not amend prior returns to reflect earlier crypto gains. Given the incomplete reporting, which the taxpayer declines to fully correct, the advisor does not sign the final return or Form 8854.
Third-party data matching later identifies inconsistencies, prompting an LB&I review that focuses on the timing and scope of the corrective filings. Now the taxpayer is in audit.
The compliance risks set out in the example above are not new. The IRS has focused on expatriation compliance and offshore reporting for many years through targeted LB&I “campaigns.” These initiatives have long emphasized international information returns, reliance on third-party data, and certifications made in connection with expatriation, including those on Form 8854.
Under the IRS current structure both civil compliance and Criminal Investigation join hands and report through leaders with strong forensic and investigative backgrounds. With this unity, LB&I reviews may more quickly evaluate whether non-filings and selective disclosures mean willfulness is present, affecting both penalty exposure and the course of the examination.
Digital Assets Hot Spot
Digital assets represent another area where enforcement capabilities are rapidly expanding. The United States has joined more than 70 jurisdictions in committing to the OECD’s Crypto-Asset Reporting Framework. CARF is the digital-asset counterpart to the Common Reporting Standard. On November 14, 2025, the Treasury Department submitted proposed regulations to implement CARF, which are currently under White House review. You can read more about this initiative in my earlier article.
Once finalized, CARF would require non-U.S. centralized crypto exchanges, brokers, and custodial wallet providers to automatically report information on U.S. persons to the IRS. Reportable data would include account identifiers, year-end fair market values, cost basis, and transaction proceeds. This regime would significantly enhance IRS visibility into offshore crypto holdings and operate alongside existing tools such as FBAR and Form 8938. For globally mobile taxpayers, CARF materially raises the detection risk associated with unreported crypto income or assets. The IRS has been very proactive in reminding taxpayers about digital asset taxation and reporting.
What Lies Ahead?
Taken together, the IRS leadership changes mean enforcement will be more centralized, technologically sophisticated, and globally oriented. These changes could have a greater impact on Americans living abroad, internationally connected families, and those contemplating expatriation, all of whom already face complexity with tax compliance.
Currently, the full impact of the IRS restructuring is not known, but these developments highlight the IRS’ intention to maximize enforcement efficiency while facing ongoing funding constraints. For all taxpayers, but especially those who face international tax issues, proactive compliance, identifying problems early on and careful planning with experienced advisors remain the most effective ways to manage risk.
Posted February 19, 2026
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First published on Forbes January 31, 2026
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