IRS Modernization, the TAS Act, and What Commercial Lenders Should Watch Published September 10, 2026
Congress doesn’t often move fast. But once in a while, it moves together, and when it does, it’s worth taking note. That makes the Taxpayer Assistance and Service Act (TAS Act, S. 3931) a noteworthy development for commercial lenders. On July 30, the Senate Finance Committee voted 26-1 to advance the bipartisan package, which contains more than 60 tax administration and taxpayer-service reforms.
It’s part of a larger trend: the IRS is under pressure to modernize the systems and workflows that process and deliver the tax information that commercial lenders rely on for underwriting, even as its funding and operating flexibility have tightened.
The bill does not change lender requirements today, but it could shape the IRS infrastructure, processing timelines, and tax-data workflows that thousands of commercial lenders rely on.
Why lenders should be taking notice
The TAS Act would establish statutory requirements, authorities, and deadlines across taxpayer service, tax administration, and IRS operations — all of which could impact the delivery of the tax data that lenders rely on.
Several provisions address longstanding bottlenecks in the way the agency processes taxpayer information. That includes requirements for the IRS to use OCR or similar technology to process paper returns and correspondence, as well as provisions aimed at improving online accounts, callback technology, refund-claim resolution, and other taxpayer-service functions.
The potential downstream effects of those updates are significant for lenders. Better IRS processing could mean faster access to cleaner, more current tax information. At the same time, changes to legacy workflows can create transition periods where processes, timing, and data availability behave differently than they do today.
Critically, the IRS is operating with less funding flexibility than it had when the current modernization push began. The Inflation Reduction Act originally provided roughly $79.4 billion for IRS activities. About $53.5 billion has since been rescinded, leaving roughly $26 billion after rescissions, with much of that already obligated. Meeting any new modernization requirements from Congress will still depend on the IRS having the funding and operating capacity to implement them. A statutory requirement can establish what the IRS needs to accomplish and by when, but implementation still depends on appropriations, technology capacity, staffing, and execution.
The TAS Act is therefore best viewed as one part of a broader shift toward more structured, digital tax administration. Some of the technology involved is sophisticated, while other provisions focus on practical digitization and workflow improvements. For lenders, the important question is how those changes affect the speed, reliability, and accessibility of the tax information used in underwriting.
How TAS could affect lenders
Faster IRS resolution could eventually improve underwriting timelines. The TAS Act would require the IRS to rule on refund claims within 12 months, compared with 36 months contemplated in the earlier discussion draft. It would also expand Tax Court jurisdiction to issue refunds directly in collection due process cases, a fix inspired in part by the Supreme Court’s Commissioner v. Zuch ruling. These remain proposed changes unless the bill becomes law.
IRS modernization could change how lenders access tax data. Many CAF authorization channels still depend on manual processing and transcription, even as Tax Pro Account and newer automation have begun moving portions of the process into real-time digital workflows. The TAS Act would put statutory requirements and deadlines around some of the agency’s efforts to improve these processes. For lenders, that makes the transition worth monitoring alongside the eventual outcome of the legislation.
Tax transcript verification remains central to small-business lending. The SBA restored more stringent tax transcript verification requirements under SOP 50 10 8, effective June 1, 2025. On August 14, 2026, SBA issued SOP 50 10 8.1, effective October 1, with the core transcript-verification requirement remaining in place. Separately, SBA doubled the cumulative combined 7(a) and 504 financing limit to $10 million, effective July 4, while the individual 7(a) maximum remains $5 million. As tax data remains embedded in lending workflows, the TAS Act’s focus on improving IRS systems and processing becomes increasingly relevant to lenders.
What’s next
The TAS Act has been reported out of the Senate Finance Committee and is positioned for possible consideration by the full Senate. The House has been taking a more piecemeal approach, passing smaller standalone bills that cover similar ground. Some TAS provisions could move individually, while others could become part of a broader year-end legislative package.
For lenders, the immediate takeaway is simple: while the TAS Act is a development worth watching, the broader shift toward faster, more digital tax administration is already underway. Regardless of the specific path the legislation takes, lenders will need greater confidence in the speed, accuracy, and accessibility of tax data throughout the underwriting process.
That’s why many lenders are investing in tools and workflows designed to reduce manual friction, streamline verification processes, and improve confidence in tax-data validation. As access to IRS data becomes more digital and expectations around speed continue to rise, having reliable, timely tax information will be increasingly important to underwriting efficiency, risk management, and the overall borrower experience.
That’s exactly the environment Tax Guard is built for: pulling verified IRS transcripts quickly and accurately, flagging discrepancies before they become underwriting surprises, and giving lenders a clear read on a borrower’s financial standing.
As the rules of the road keep evolving, having a reliable, real-time view into the data that actually matters is what lets lenders move fast with confidence.
