Cut in taxes uncovered (3)
I believe the answer is:
axe
'cut' is the definition.
(both can mean to cancel or remove)
'in taxes uncovered' is the wordplay.
'in' indicates the answer is hidden within the clue.
'AXE' is hidden in the letters of 'taxes uncovered'.
(Other definitions for axe that I've seen before include "Abandon project or cut back on resources" , "fell" , "Dispense with" , "Cancel" , "Tool for chopping wood" .)