IRS Prepares for 2026 Tax Season Amid Challenges

As the tax season kicks off and the IRS gears up to handle millions of returns, its internal watchdog is raising concerns that some taxpayers might face issues in 2026.

Erin Collins, a tax advocate, mentioned in a recent report that while the 2025 filing season was fairly smooth, the upcoming year might pose “greater challenges” for certain filers. Her comments came in an annual report to Congress.

In 2025, the IRS operated with its highest staff levels in years and processed over 165 million individual returns, leading to most filers receiving their refunds on time. However, Collins pointed out that layoffs of 27% within the agency, a leadership change, and the introduction of complex tax law changes under President Trump’s administration could significantly alter the landscape for 2026.

Future Filing Season Outlook

According to Collins, the 2026 filing season could go smoothly for taxpayers who file electronically and ensure their returns are error-free. Yet, the success of this season really hinges on how effectively the IRS can support those experiencing difficulties.

The Treasury Inspector General for Tax Administration (TIGTA) recently released a report voicing concerns about the IRS’s readiness for the upcoming tax period. IRS Chief Executive Officer Frank Bisignano stressed that the agency is prepared to assist taxpayers as they navigate their obligations during the 2026 filing season.

Moreover, thanks to the tax cuts from Trump’s “Big and Beautiful Bill,” many individuals might anticipate even larger refunds in 2026. However, the IRS hasn’t made updates to the withholding tax table, which could lead to noticeable impacts when filers submit their 2025 returns later on.

Tax refunds are under the spotlight, especially as more Americans grapple with rising living costs. This topic is likely to influence discussions as the midterm elections of 2026 draw near.

Potential Hurdles Ahead

The IRS typically handles over 100 million calls and numerous taxpayer inquiries annually, but a report from a national taxpayer advocacy group highlights a 22% drop in customer service representatives in 2025.

While some positions were filled later, the count remains significantly lower compared to the previous filing season, and the newer hires have less experience. With these staffing challenges, taxpayers might find themselves increasingly reliant on self-service tools offered by the IRS.