What To Expect For Tax Season in 2026

I won’t sugar-coat it: the Internal Revenue Service (IRS) is going through it this year, and we’re warning our clients now that they may experience significant delays with filing their 2025 taxes. 

Here’s the full story: the Treasury Inspector General for Tax Administration (TIGTA) has published its fiscal year 2026 priorities, which highlight some big challenges for the IRS. The report indicates that there will be substantial workforce reductions, which means more backlogs on processing, as well as continued delays in technology modernization. 

These issues can have a direct effect on taxpayers and tax professionals during 2026. Let me break it down for you.

A Smaller Workforce Means Rising Backlogs

TIGTA reports that staffing has fallen by about 17-19% in critical filing season operations. These reductions are already impacting IRS operations and it’s anticipated that they’ll continue to intensify through 2026. It’s estimated that backlog inventories may swell to approximately six million cases, which is two million more than the peak levels experienced during the COVID-19 pandemic.

Phone support is also being impacted; the IRS estimates that it will need roughly 3,500 new hires to fully staff its call centers. Without this staffing, taxpayers may have longer wait times, less access to live support, and fewer opportunities to effectively resolve issues.

IRS Technology Modernization Faces Ongoing Delays

TIGTA also raised concerns about the IRS’s information-technology modernization efforts, warning of delays in the “zero-paper” initiative and other digital efforts which could hinder taxpayer services and enforcement next year. 

What to Expect as a Taxpayer or Tax Professional

As 2026 approaches, TIGTA’s findings indicate that taxpayers and practitioners may need to prepare for:

• Longer processing times for routine tasks such as: 

• Return processing

• Amended returns

• Transcript requests

• Responses to IRS notices

• For tax professionals, modernization delays can make case resolution more complex and increase the need for additional follow-up and documentation

• Tax practitioners should also anticipate processing delays, increased audit inventories, and more client outreach regarding notices

How Personal Financial Services Is Helping

Since filing season 2025, Personal Financial Services has been asking clients to complete IRS Form 8821 which allows us to receive copies of any IRS letters you receive. This allows us to monitor correspondence in real time and respond more efficiently amid growing delays.

If it is an actionable IRS letter, we will notify you so that we can review the next steps and determine the best course of action. This proactive approach helps prevent missed deadlines, reduce stress, and make sure that issues are addressed promptly, even in light of staffing and technology difficulties at the IRS.

Planning Ahead

While many IRS challenges are outside a taxpayer’s control, partnering with a trusted tax advisor can make a significant difference. Staying informed, responding promptly to notices, and authorizing your advisor to communicate directly with the IRS can help minimize stress and delays. 

If you have questions about IRS correspondence, Form 8821, or how these changes may affect your tax situation or preparation, please don’t hesitate to get in touch with us. At Personal Financial Services, we’re here to guide you and help you navigate the year ahead with confidence and security.