IRS faces challenges in 2026 tax season due to workforce cuts, new laws: Watchdog

WASHINGTON– The national taxpayer advocate warns that the 2026 tax filing season will likely present challenges for taxpayers who are having problems filing their taxes, given the exodus of IRS workers since the start of the Trump administration.

National Taxpayer Advocate Erin M. Collins released her annual report to Congress on Wednesday, two days after the start of the 2026 season. She notes that while the IRS was able to process returns in 2025 without major disruptions, “beginning in 2026, the landscape is markedly different.”

“The IRS is simultaneously facing a 27 percent reduction in its workforce, a change in leadership, and the implementation of broad and complex tax law changes” imposed by the Republican tax and spending measures that President Donald Trump signed into law last summer, Collins said in his report.

Collins says most taxpayers should be able to file their returns and receive their refunds without delay, but she notes that “the success of the filing season will be defined by the IRS’s ability to help the millions of taxpayers who are experiencing problems.”

The tax filing season began Monday and agency leaders, including Treasury Secretary Scott Bessent and IRS CEO Frank Bisignano, said they expected a smooth season.

Bisignano announced new priorities and a reorganization of IRS executive leadership in a letter to the agency’s 74,000 employees last week, saying he was “confident that with this new team in place, the IRS is well prepared to deliver a successful tax filing season for the American public.”

Bessent and other members of the second Trump administration also promised American taxpayers “substantial tax refunds,” as part of the Republican administration’s proposed solution to the ongoing affordability crisis.

Still, other IRS watchdogs have raised major concerns as the 2026 tax season begins.

Diana M. Tengesdal, deputy inspector general for auditing at the Treasury Inspector General for Tax Administration, wrote a letter to IRS leaders Monday and highlighted IRS staffing at October 2021 levels, combined with thousands of unprocessed tax returns and taxpayer correspondence.

The IRS started 2025 with about 102,000 employees and ended with about 74,000 after a series of layoffs and furloughs brought about by the Department of Government Effectiveness. While last year, IRS employees involved in the 2025 tax season were not allowed to accept a buyout offer from the Trump administration before the taxpayer filing deadline, this year many of those customer service employees left.

Tengesdal’s office says that despite new efforts to modernize tax administration, “initiatives to compensate for staff losses may not produce the expected benefits during the 2026 tax filing season.”

More than 165 million personal income tax returns were processed in 2025, 94% of them electronically. The average reimbursement was $3,167.

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