Key Takeaways
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Frank Bisignano, head of the Social Security Adminstration, takes on new "IRS CEO" position.
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Treasury Secretary Bessent keeps his IRS Acting Commissioner title.
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No shutdown end in sight.
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IRS to furlough nearly half of workforce if shutdown continues.
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Supreme Court starts session with tariffs, takings on docket.
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National Noodle Day.
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Bessent Picks Social Security Chief Frank Bisignano as IRS CEO - Brian Schwartz and Richard Rubin, Wall Street Journal:
Bisignano will retain his job running the Social Security Administration while managing the IRS’s day-to-day operations, according to senior administration officials. He will report directly to Bessent, who will remain the formal head of the IRS as acting commissioner. The move lets the administration install a Trump appointee at the IRS quickly without going through the Senate confirmation process.
Bisignano will help implement the administration’s vision for the IRS, which emphasizes upgraded technology and retreats from the heavier enforcement initiatives started under President Joe Biden. He’ll face two immediate challenges: getting ready for the early 2026 tax-filing season and managing a government shutdown. The IRS is fully open for the first five business days of the shutdown using money outside of annual appropriations; it is less certain what happens beyond that.
If we count Mr. Bisignano as the new "head" of the IRS, he is the eighth one the IRS has had just this year. President Trump named the hapless Billy Long as his nominee for IRS Commissioner shortly after the 2024 election, but the Senate didn't get around to approving the nomination until June 16 of this year. In the meantime, the IRS churned through acting commissioners as a result of its attempts to share data with ICE and via internal Treasury infighting.
Only a few weeks after Mr. Long was confirmed, the administration decided his social media skills were best employed waiting as Ambassador to Iceland. Treasury Secretary Bessent took on the Acting IRS Commissioner title as a side hustle to his full-time job. He is keeping the title, but apparently not the heavy lifting.
When or whether the administration fills the IRS Commissioner position, which is a congressionally-mandated post, is uncertain.
Treasury Department Announces Frank Bisignano as Chief Executive Officer of the IRS - Treasury Department Press Release:
Apparently the Social Security gig isn't so demanding that he can't take on another full-time job.
Shutdown Lowdown
Shutdown Day 6: Will Democrats blink? - Andrew Desiderio, Jake Sherman and John Bresnahan, Punchbowl News:
But Senate GOP leaders continue to believe that enough Democratic senators will cross the aisle eventually to pass the Republican CR, so they aren’t abandoning their strategy of forcing successive votes. If Democrats block the measure again, Senate Majority Leader John Thune can set up another vote for Tuesday. If that fails, the next vote wouldn’t be until Thursday.
Remember: These are cloture votes at a 60-vote threshold. Sen. Rand Paul (R-Ky.) is a no, meaning eight Senate Democrats would have to vote yes to move forward. Sens. John Fetterman (D-Pa.), Catherine Cortez Masto (D-Nev.) and Angus King (I-Maine) are the only yes votes. King, an independent, caucuses with Democrats.
Shutdown Showdown - Jack Blanchard and Dasha Burns, Politico:
Capitol Hill Recap: Taxes and the Shutdown - Alex Parker, Eide Bailly:
According to the Department of the Treasury’s shutdown plan, many offices, including the Office of Tax Policy, will continue to perform core functions with reduced staff. (Which could include coordinating with Congress about tax policies that might be part of an agreement to open the government, the plan notes.) If the shutdown stretches beyond five days, it may recall “policy experts to address issues related to domestic and international economic affairs,” the plan states.
Past experience has shown that shutdowns can be chaotic and unpredictable—in Congress and in federal agencies. That will likely be even more true this time around, with an administration that has not been hesitant to revisit past practices.
Shutdown and the IRS
IRS to Furlough Nearly Half of Workers If Shutdown Persists - Erin Slowey, Bloomberg ($):
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The furloughs are a shift from the current plan having IRS maintain normal operations for the first five days using funds from the 2022 tax-and-climate law. In past administrations when employees were proposed to be furloughed, audit functions, examinations of returns, non-automated collections, and answering taxpayer phone calls were to stop.
The shutdown comes as the IRS works to implement President Donald Trump’s multitrillion-dollar tax-and-spending package, and as the Oct. 15 deadline approaches for individuals and companies filing taxes with extensions.
AICPA calls for fully staffed IRS regardless of shutdown length - Martha Waggoner, The Tax Adviser:
The Senate is set to vote again on a funding bill today, one day before IRS funding is scheduled to end. Taxpayers, C corporations, and tax advisers must meet an Oct. 15 filing deadline, then work begins on the next tax filing season, Melanie Lauridsen, the AICPA’s vice president–Tax Policy & Advocacy, said in a news release.
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The combination of tax deadlines, the start of a new filing season, and guidance needed for H.R. 1 means the consequences of a drastically reduced IRS workforce would be dire, the AICPA said.
IRS Capacity For 2026 In Danger Due To Cuts, TIGTA Warns - Anna Scott Farrell, Law360 Tax Authority ($):
In a report, the IRS' federal watchdog said it was concerned about how workforce reductions that began under President Donald Trump would potentially impact the 2026 filing season, noting that key departments have lost 17% to 19% of their staff.
TIGTA projected that the loss of 2,000 employees from the agency's accounts management section, which processes tax returns and inventory, "may affect the IRS' ability to timely process tax returns during the 2026 filing season."
Life after EV Credits
Tax Credits Are Gone But Cheaper EVs Are Coming - Alan Ohnsman, Forbes:
An even more helpful move could be Hyundai’s decision to slash prices for its Georgia-built Ioniq 5 by as much as $9,800, setting the base price for the electric hatchback at just $35,000 (slightly above the South Korean brand’s Kona EV, at about $33,000). Nissan is rolling out a restyled version of its Leaf with a starting price just below $30,000 that offers 300 miles of range per charge. GM is also preparing to sell a revamped version of its battery-powered Chevrolet Bolt in early 2026 that’s expected to have a base price below $30,000. The company’s EV sales surge this quarter was led by its electric Equinox compact crossover, which starts at about $35,000, in line with what similarly sized gasoline-powered models sell for. Add in Tesla’s Model 3 sedan, starting at $42,490, and Kia’s EV6 crossover, priced from $43,000, and U.S. consumers have a growing number of options that are all less expensive than the current average new vehicle price of just over $49,000.
Prices would go even lower if the U.S. reversed restrictions on imported Chinese EVs, which would put sub-$30,000 models from BYD, Xpeng and Xiaomi on the market, but there’s little chance of that happening in the foreseeable future.
Supreme Court Returns With Some Tax Work
SCOTUS to Hear Michigan Takings Case Involving Equity Loss - Cameron Browne, Tax Notes ($):
In an October 3 order in Pung v. Isabella County, the Court agreed to review whether Isabella County, Michigan, violated the Fifth Amendment's takings clause by giving a deceased taxpayer's estate compensation that was based on a property's depressed auction price rather than the fair market value.
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The property was sold at a tax foreclosure sale for only $76,008, which was less than the county’s annual property valuation of $194,400. After the auction, the purchaser sold the property for $195,000. The county retained all the proceeds from the tax foreclosure sale.
Of course, the biggest tax case on the Supreme Court docket is the consolidated challenge to the Trump Administration "Liberation Day" tariffs.
Tariffs: Higher Home, Coffee, Shrimp Prices
UBS: U.S. lumber tariffs could add $8,900 to cost of building a home - Seeking Alpha:
Research analyst John Lovallo said the new levies include “an incremental 10% Section 232 tariff on softwood timber and lumber imports, as well as 25% levies on kitchen cabinets, vanities and upholstered wood products.”
UBS estimates the lumber tariff will add about $720 per home, while cabinet and vanity tariffs could tack on another $280. Upholstered wood products were not included in the calculation because they are generally purchased by homeowners rather than builders.
Hell Hath No Fury Like a Coffee Drinker in 2025 - Rachel Louise Ensign, Wall Street Journal:
Lots of things are more expensive, but coffee isn’t like cereal or chicken. The daily fix is all that’s keeping millions from a throbbing headache and foul mood. So while people may wince at the price, they’re buying it anyway–and reserving the right to rant.
Shrimp caught in tariff net as US buyers are forced to shell out more - Taylor Nicole Rogers, Financial Times:
The price of the most popular seafood in America is “going up not gradually, but quite drastically”, India-based shrimp importer Avanti Feeds warned last month. Imports from Ecuador, another major exporter, have a 21.9 per cent average tariff.
The average wholesale price of a pound of peeled and deveined tail-on white shrimp rose to $6.25, a 21 per cent increase since April. Trump imposed a 25 per cent tariff on India this summer over its purchases of Russian oil, which he doubled to 50 per cent in August.
If Trump’s Tariffs Are Ruled Illegal, Businesses Expect Refund Chaos - Laura Curtis, Bloomberg News:
Should Trump’s country-based tariffs be deemed illegal, the US could owe the bulk of the $165 billion in customs duties collected so far this fiscal year back to companies that paid them. But they won’t have an easy time getting their money back; refunds are typically issued slowly with paper checks and while the administration could streamline the process to repay the funds en masse, experts fear that’s unlikely.
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Importers could be required to file what’s called a protest or post-summary correction, along with proof of every payment made and copies of all the importer-data that the government already has.
Blogs and Bits
ACA subsidies and the current government shutdown - Kay Bell on Substack. "The contentious component is the federal tax credit available to individuals who buy health care coverage through Affordable Care Act (ACA officially and informally still Obamacare to many) marketplaces."
What Is A Value Added Tax? - Pierre Lemieux, Econlog:
The unraveling of Obamacare? - Tyler Cowen, Marginal Revolution. "By the way, how are we supposed to pay for all of this? Repealing the recent Trump tax cuts and raising taxes on the rich doesn’t seem to come close to bringing the budget into balance. Endorse a VAT if you wish, but then do so! And let us have that debate. In the meantime everyone is just playing games with us."
Op-ed: Shutdown theatrics just distract us from the REAL problem - Romina Boccia, The Debt Dispatch. "They rarely cut government spending, they don’t rein in the debt, and they don’t force lawmakers to make the tough choices our nation desperately needs."
Quotable
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