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By Sam Stevenson
Associate News Editor
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The Internal Revenue Service (IRS) heads into the 2026 tax season with deep staff losses and complex new tax laws, prompting a warning that filers may face tougher hurdles if they hit problems.
In her annual report to Congress on Wednesday, National Taxpayer Advocate Erin M. Collins said the agency's 27 percent workforce reduction, leadership turnover, and extensive retroactive tax law changes could strain IRS processing capacity and slow down help for those who need assistance.
These challenges mark a sharp change from 2025, when a larger workforce and fewer policy shifts helped deliver one of the smoothest filing seasons in years, according to Collins.
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Newsweek contacted the IRS for comment by email outside of regular working hours.
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What To Know
The IRS ended 2025 with about 74,000 employees, down 27 percent from roughly 102,000 at the start of the year, pressuring customer service and case processing.
Collins reported that the IRS processed more than 165 million individual returns in 2025, with about 94 percent filed electronically and an average refund of $3,167 for approximately 104 million recipients.
Most refunds were timely last year, but about 3.6 million taxpayers waited beyond normal processing times, averaging seven weeks for e-filers and 14 weeks for paper filers, according to the report.
For 2026, Collins said e-filers who include direct deposit and whose returns are not flagged by IRS filters should see quick processing and timely refunds.
Collins emphasized that the season's success will hinge on how effectively the IRS assists "millions of taxpayers who experience problems" as staffing reductions and law changes strain operations.
The One Big Beautiful Bill Act (OBBBA) expanded eligibility for several deductions and benefits, including items such as income from tips and auto loan interest, but added complex eligibility rules, thresholds, and phase-outs that could cause errors and delays.
Although IRS leaders — including Treasury Secretary Scott Bessent and IRS Chief Executive Officer Frank Bisignano — insist the agency is prepared, internal watchdogs are less confident.
Bisignano outlined new priorities and a reshaped IRS leadership team this month in a letter to the agency's 74,000 employees, saying he was "confident" the IRS was "well‑prepared to deliver a successful tax filing season for the American public."
Bessent, along with other members of Trump's second administration, has also pledged that Americans can expect "substantial tax refunds," framing it as part of the Republican administration's response to the ongoing affordability crisis.
But a letter from the Treasury Inspector General for Tax Administration flagged unprocessed returns, backlogged correspondence and staffing levels that have fallen to those last seen in 2021.
What People Are Saying
Collins wrote in her report: "For the significant majority of taxpayers who file their returns electronically, who include their direct deposit information, and whose returns are not stopped by IRS processing filters, the process will be seamless... Their returns will be processed quickly, and if they are due a refund, they will receive it without delay."
However, she noted: "The success of the filing season will be defined by how well the IRS is able to assist the millions of taxpayers who experience problems."
She added: "Among the reasons the 2025 filing season went well was that the IRS had its largest workforce in many years and faced no major tax law changes that required implementation during the filing season.
"Entering 2026, the landscape is markedly different. The IRS is simultaneously confronting a reduction of 27 percent of its workforce, leadership turnover, and the implementation of extensive and complex tax law changes mandated by the [One Big Beautiful Bill] Act, many of which apply retroactively and require significant IRS programming, guidance, changes to tax forms and instructions, and taxpayer education."
Bisignano said: "The Internal Revenue Service is ready to help taxpayers meet their tax filing and payment obligations during the 2026 filing season.
"As always, the IRS workforce remains vigilant and dedicated to their mission to serve the American taxpaying public. At the same time, IRS information systems have been updated to incorporate the new tax laws and are ready to efficiently and effectively process taxpayer returns during the filing season."
Bessent said: "President Trump is committed to the taxpayers of this country and improving upon the successful tax filing season in 2025. Prior to the passage of the One, Big, Beautiful Bill, which delivered working families tax cuts, Treasury and IRS were diligently preparing to update forms and processes for the benefit of hardworking Americans, and I am confident in our ability to deliver results and drive growth for businesses and consumers alike."
What Happens Next
The IRS will continue implementing retroactive provisions of the OBBBA during the current filing season, and taxpayers will see updated forms, instructions, and guidance as programming and education efforts progress.
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