Additional Coverage:
- IRS watchdog warns American taxpayers may face ‘greater challenges’ amid recent issues (marketrealist.com)
Tax Season Kicks Off with Warnings of Potential Hurdles for American Taxpayers
As tax season officially commenced this week, the Internal Revenue Service (IRS) is gearing up to process millions of returns. However, an internal watchdog is sounding the alarm, cautioning that this year’s process might be bumpier than the last. The National Taxpayer Advocate warns that some taxpayers could face “greater challenges” as the IRS navigates new regulations amidst a significant workforce reduction.
The workforce crunch follows a substantial exodus of employees since the beginning of Donald Trump’s administration. While IRS officials have expressed confidence in a smooth filing season, several other watchdogs have echoed concerns, according to ABC News.
National Taxpayer Advocate Erin M. Collins released her annual report on Wednesday, just two days after the start of the 2026 tax filing season.
She highlighted that while the IRS managed to process returns in 2025 without major disruptions, “entering 2026, the landscape is markedly different.” Last year, the IRS benefited from its largest workforce in recent memory and no major tax law changes, allowing it to process over 165 million individual returns efficiently, with most filers receiving their refunds in a timely manner.
However, Collins noted that in 2026, the agency is grappling with a 27% reduction in its workforce, leadership turnover, and the implementation of extensive and complex tax law changes stemming from the Trump administration’s “One Big Beautiful Bill Act.” Furthermore, in 2025, the IRS trimmed its workforce by 74,000 workers due to firings and layoffs initiated by the Department of Government Efficiency. While customer service workers in the 2025 tax season were not permitted to accept buyout offers until after the filing deadline, a significant portion of those employees have since departed this year, ABC News reports.
Collins emphasized that the 2026 filing should be “seamless” for taxpayers who file electronic returns, expecting error-free submissions and direct deposit of refunds. However, she cautioned that “the success of the filing season will be defined by how well the IRS can assist the millions of taxpayers who experience problems.”
Other IRS watchdogs have also outlined similar significant concerns. Diana M.
Tengesdal, Deputy Inspector General for Audit at the Treasury Inspector General for Tax Administration, penned a letter to IRS leadership on Monday, drawing parallels to the IRS staffing levels of 2021, when thousands of returns went unprocessed. Tengesdal’s office noted that despite efforts to modernize tax administration, “initiatives to offset staffing losses may not yield expected benefits during the 2026 Filing Season.”
Conversely, IRS Chief Executive Officer Frank Bisignano asserted earlier in January that “The Internal Revenue Service is ready to help taxpayers meet their tax filing and payment obligations during the 2026 filing season,” as reported by CNBC. Bisignano announced last week that new priorities and a reorganization of IRS executive leadership had been implemented, stating his confidence that “with this new team in place, the IRS is well-prepared to deliver a successful tax filing season for the American public.”