The 2026 tax filing season, starting January 26 with an April 15 deadline, faces significant challenges due to a 26% reduction in IRS staff from layoffs and buyouts. This coincides with the implementation of complex new Republican tax laws retroactively affecting 2025, raising concerns about processing efficiency and potential taxpayer confusion despite IRS assurances.
The 2026 tax filing season officially begins on January 26, with the IRS accepting and processing 2025 tax returns until the April 15 deadline. However, this season is expected to be particularly challenging due to a substantial reduction in the IRS workforce. Tens of thousands of tax collection workers have left through layoffs and buyouts, reportedly spurred by "Elon Musk’s Department of Government Efficiency," resulting in a 26% staff decrease from 102,113 to 75,702. Tax experts and the National Taxpayer Advocate have warned that this could lead to a 'rocky' season. Despite these cuts, IRS Chief Executive Officer Frank Bisignano assures the public of the workforce's dedication and updated information systems ready to process returns under new tax laws. The IRS is also implementing major provisions from a Republican tax and spending package, signed last summer, which retroactively affect the 2025 tax year. These changes are expected to generate more taxpayer questions and require updated tax forms. Acting IRS Commissioner Scott Bessent expressed confidence in the agency's ability to deliver results and anticipates bigger tax refunds in 2026 due to the new Republican tax law. The IRS expects to receive around 164 million individual income tax returns, similar to last year, when the average refund was $3,167.
