"What I don't understand is that as I increase the value of the IRA valuation, the federal tax liability amount declines."
That is a bit odd. Are you sure that it's not a tax refund that is declining?
Otherwise, perhaps the increase in AGI is changing the amount of some tax credit you are receiving. The way to sort this out is to look at your entire From 1040 to see how an increase in year-end value, and thus an increase in AGI and taxable income, is resulting in a decrease in tax liability.
