What the IRS's 2026 Filing Season Report Means for Taxpayers
Each year, the Treasury Inspector General for Tax Administration (TIGTA) evaluates how the IRS performed during filing season. While the report is written for Congress and IRS leadership, it also offers valuable insight into how the agency is functioning—and what taxpayers can expect when dealing with the IRS. The Interim Results of the 2026 Filing Season show an agency making meaningful progress in some areas while continuing to struggle in others. Returns are being processed efficiently, but staffing shortages, growing inventories, and manual review continue to delay certain types of cases. Understanding those trends can help taxpayers set realistic expectations when interacting with the IRS.
The IRS Is Processing Returns Efficiently, but Some Delays Persist
The IRS expects to receive approximately 164 million individual income tax returns during the 2026 filing season. As of February 28, it had already received 51.5 million returns, processed 50.9 million of them, and issued 36.5 million refunds. The average refund was $3,742—about $360 higher than at the same point during the 2025 filing season.
Nearly 99% of returns were filed electronically, allowing most taxpayers to move through the processing system without significant delays. Paper returns, however, remain more labor-intensive and require additional handling before they can be processed.
While routine return processing has remained efficient, the report identifies several operational challenges that continue to affect amended returns, paper filings, and other cases requiring manual review.
Staffing Shortages Continue to Affect IRS Operations
Staffing remains one of the IRS's biggest operational challenges.
Two divisions were particularly affected during the 2026 filing season. The Submission Processing function, which handles original and amended tax returns, filled only 42% of its approved positions. The Accounts Management function, which answers taxpayer calls, processes correspondence, and adjusts taxpayer accounts, filled 66% of its approved positions.
The IRS responded by reassigning employees, increasing overtime, and continuing to hire throughout the filing season. Even so, staffing shortages continue to affect amended returns, taxpayer correspondence, and other issues requiring manual review.
Those staffing challenges are also reflected in the agency's growing inventory of unresolved cases.
IRS Backlogs Are Beginning to Grow Again
After making significant progress reducing the backlogs that developed during and after the COVID-19 pandemic, the IRS is beginning to see inventories rise again.
Between the start of filing season and February 28, the agency's inventory increased from 1.9 million to 2.4 million cases. Paper return inventory nearly doubled, and more than 72% of amended return cases exceeded the IRS's timeliness goals.
Most electronically filed returns continue to be processed efficiently. Delays are more likely to affect taxpayers with paper returns, amended returns, or issues requiring manual review.
Rather than relying solely on additional hiring, the IRS is also investing heavily in automation to reduce manual workloads and improve long-term efficiency.
The IRS Is Investing in Paperless Processing
One of the biggest operational changes underway is the IRS's Zero Paper Initiative, an effort to digitize paper returns and taxpayer correspondence before they enter the processing system. During the 2026 filing season, the IRS scanned more than 76,000 paper Forms 1040 into digital format and continued expanding automation designed to reduce manual processing.
The agency is also expanding automated processing for amended returns. As of March 27, it had implemented 45 automated adjustment scenarios and processed more than 36,000 amended returns through the new system. Many amended returns will still require review by an IRS employee, but these initiatives should improve processing times for more routine cases while allowing employees to focus on more complex matters.
The IRS Is Transitioning Away from Paper Refund Checks
One of the most significant operational changes this year involves how the federal government issues payments. Under Executive Order 14247, federal agencies are moving away from paper checks whenever possible, and the IRS has begun implementing that policy for tax refunds.
The agency expanded its online tools and introduced the CP53E notice for taxpayers whose direct deposit information needs to be updated. By the end of March, more than 1.9 million CP53E notices had been issued.
Receiving one of these notices does not mean a refund has been denied. In many cases, the IRS simply needs updated banking information before issuing the payment electronically.
Although paper refund checks remain available in certain circumstances, electronic payments are clearly becoming the default. Taxpayers should ensure their banking information is current and respond promptly to IRS correspondence requesting updated payment information.
The IRS Continues to Expand Digital Services
The IRS is also investing in online tools that allow taxpayers to manage routine account issues without calling the agency or visiting a Taxpayer Assistance Center.
During the early weeks of the filing season, IRS.gov received more than 287 million visits, and approximately 64.4 million taxpayers were enrolled in an IRS Individual Online Account—a 25% increase from the previous year. Through the online account, taxpayers can view balances, access tax records, review notices, and monitor account activity.
These tools won’t resolve every tax issue, but they reduce the need for many routine phone calls and make it easier for taxpayers to access information when they need it.
Reaching the IRS by Phone Remains Challenging
Despite the expansion of online services, many taxpayers still need to speak with an IRS representative.
During the early weeks of the 2026 filing season, the IRS answered approximately 3.2 million calls, while average wait times increased from 3.4 minutes to 8.2 minutes.
The takeaway is straightforward: online resources continue to improve, but resolving issues that require direct assistance may still involve longer wait times, particularly during peak filing season.
Identity Theft Prevention Remains a Priority
Protecting taxpayers from identity theft and fraudulent refund claims remains a major focus for the IRS.
As of late February, the agency had stopped more than $613 million in fraudulent refunds, confirmed approximately 19,000 identity theft returns, and prevented an additional $138.5 million in fraudulent refunds tied to identity theft.
These efforts help protect taxpayers, but they can also result in additional verification before a refund is issued. When the IRS detects suspicious activity, legitimate taxpayers may experience delays while their identities are confirmed.
One of the IRS's most effective fraud prevention tools is the Identity Protection PIN (IP PIN). For the 2026 filing season, the agency issued approximately 6.6 million IP PINs, including
more than 571,000 voluntarily requested by taxpayers. Originally developed for identity theft victims, the program is now available to most taxpayers who wish to add another layer of protection against fraudulent filings.
What Does the Report Mean for Taxpayers?
The 2026 filing season reflects an IRS that is modernizing its operations while continuing to manage staffing shortages and increased workloads. For most taxpayers, these challenges won't have a noticeable impact. Electronically filed returns continue to be processed efficiently, and expanded online services make it easier to manage many routine tax matters.
Those filing paper returns, amended returns, identity verification requests, or other matters requiring manual review, however, should be prepared for longer processing times. The same is true for taxpayers who need assistance by phone during the busiest months of the filing season.
When IRS Delays Can Have Bigger Consequences
For many taxpayers, a delayed refund or a longer wait on hold with the IRS is simply an inconvenience. For those dealing with collection notices, back taxes, unfiled returns, penalties, or other disputes, delays can have more significant consequences.
IRS processing delays do not stop interest from accruing, extend filing deadlines, or necessarily halt collection activity. Taxpayers facing these issues should understand their rights, respond promptly to IRS notices, and consider seeking professional guidance before a problem becomes more difficult to resolve.
Looking Ahead
The TIGTA report paints a picture of an IRS that is processing routine filings efficiently while continuing to modernize its operations. At the same time, taxpayers with more complicated matters—including amended returns, collection issues, and unresolved account problems—should continue to expect longer timelines.
The best way to avoid unnecessary delays is to stay current with filing requirements, respond promptly to IRS correspondence, and address tax problems before they become more difficult to resolve.
Questions About an IRS Notice or Tax Debt?
IRS processing improvements don't eliminate the challenges taxpayers face when dealing with back taxes, collection notices, penalties, amended returns, or other complex tax
matters. Understanding your rights and addressing problems early can often improve the range of available resolution options.
Bryson Law Firm represents individuals and businesses in resolving IRS tax controversies, negotiating payment solutions, and addressing complex federal tax issues.
Contact us today to schedule a consultation and learn how we can help.
