IRS Faces Tough Times: What Taxpayers Should Know
In her recent Annual Report to Congress, National Taxpayer Advocate Erin Collins revealed that while the taxpayer service had a solid performance in 2025, the upcoming 2026 tax season may pose significant challenges for many Americans. With a sharp 27% reduction in workforce at the IRS and complex tax law changes from the One Big Beautiful Bill, Collins highlights a stark shift in the landscape that taxpayers need to prepare for.
The Bright Spot: 2025's Smooth Filing Season
2025 was a year marked by successful IRS operations, with over 165 million tax returns processed and 94% of those filed electronically. Taxpayers were generally pleased, as the average refund amounted to $3,167, with most receiving their refunds quickly. However, about 3.6 million taxpayers experienced delays, particularly among those with identity theft concerns, waiting over 21 months for resolution. As we look forward, Collins acknowledges the importance of tackling such lingering issues during the 2026 filing season.
Challenges on the Horizon for 2026
According to the report, 2026 could be drastically different, with the IRS facing immense pressure due to staffing cuts and the implementation of complicated tax laws. Collins cautions that while most filers who submit electronic returns with direct deposit might find a seamless experience, those encountering issues—even minor ones—could find themselves in a tough spot. Historical data indicates that taxpayers struggle during periods of IRS transition, especially when shifts in staffing occur amid ongoing complexities in tax filing procedures.
Accessing Help Amidst Staffing Reductions
Collins points out that the IRS experienced a workforce reduction from 102,000 employees at the start of 2025 to just 74,000 by year-end. This reduction puts additional strain on customer service, with less experienced representatives likely to be answering taxpayer calls. The limited availability of staff means taxpayers may need to increasingly utilize IRS self-service tools, which aren’t always user-friendly.
What Can Taxpayers Do?
To navigate these challenges, taxpayers should familiarize themselves with the IRS's online resources and remain proactive about their filings, ensuring they have direct deposit information ready when submitted electronically. Collins emphasizes the need for awareness regarding potential delays and roadblocks, particularly for those who might face unique situations affecting their returns. Understanding these changes and preparing early can help mitigate potential hassles when the 2026 tax season rolls around.
The IRS has faced numerous challenges in recent years, and while the future remains uncertain, a well-informed taxpayer can better navigate the complexities ahead. As Collins noted, how well the IRS manages to assist those who experience issues will determine the success of the upcoming filing season. Stay engaged, stay informed, and consider seeking assistance if necessary to ensure your tax experience remains as smooth as possible.
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