IRS staffing crunch could slow tax refunds, watchdog report says
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If your tax return hits a snag this year, getting help from the IRS could take longer — and more complex refunds could be slow to arrive too.
Why it matters: A Treasury watchdog report warns the Internal Revenue Service entered the 2026 filing season short-staffed and overwhelmed, increasing the risk of delays and service problems for millions of taxpayers.
- "As the service navigates historic shortages," Erica Mariani, a tax manager at AlphaCore Wealth Advisory, tells Axios, "there are simply less individuals covering the same, likely larger, amount of work."
The big picture: A January report by the Treasury Inspector General for Tax Administration found the IRS has lost about 19,000 employees over the past year amid federal workforce reductions.
- Staffing in key filing-season programs has fallen back to roughly 2021 levels, before the agency expanded hiring and customer service.
- At the same time, inventories of unprocessed returns and taxpayer correspondence have surged. As of December, the IRS was carrying roughly 2 million unresolved cases, more than double pre-pandemic levels.
By the numbers: The IRS approved 2,200 new hires to help process original and amended tax returns this filing season.
- But as of late December, just 50 workers — about 2% — had been onboarded, according to the report.
- Training new employees can take 60 to 80 days, meaning many new hires won't be ready in time to help this season.
Yes, but: Treasury Secretary Scott Bessent said Wednesday the department is working to use artificial intelligence to improve customer service at the IRS and reduce pressure on call centers, even as the report warns staffing shortages could strain the agency this filing season.
- The concern isn't new: Last year, IRS employees were barred from taking a White House deferred resignation offer until after tax season, over fears that losing workers during filing season could delay refunds.
Zoom out: IRS officials say technology upgrades and automation will eventually help offset staffing losses.
- But the report cautions those systems won't be fully operational until after this filing season, meaning taxpayers are unlikely to see meaningful relief this year.
What this tax season could look like for taxpayers
Zoom in: For most filers, the IRS staffing crunch is most likely to show up in how returns are processed — and how long it takes to get help if something goes wrong.
- "The most immediate impact for taxpayers is longer wait times for IRS customer service, followed by slower processing for returns the agency considers complex, which can delay refunds," Rob Torres, Cleo's lead financial expert, tells Axios.
Refund delays: Returns that require manual handling — including paper filings, amended returns, or those flagged for identity verification or mismatched income — are most at risk.
Longer waits for help: The IRS has lowered its phone service target to 70%, down from 85% last filing season.
- In-person Taxpayer Assistance Centers have reopened after last fall's government shutdown, but staffing shortages mean hours and availability can vary.
Unusual staffing moves: To keep operations running, the IRS is temporarily assigning employees from other departments, including HR and IT — some with no direct tax experience — to answer phones and assist with processing.
How taxpayers can avoid delays
How you file may matter more than IRS staffing levels.
- "Straightforward tax returns, especially e-filed returns with direct deposit that do not get flagged for review, are typically less likely to experience service issues," Chris Mallon, a financial advisor at The Capstone Planning Group, tells Axios.
Experts suggest also double-checking returns to make sure W-2s, 1099s and other income forms match what's reported.
- They recommend using IRS online tools — including "Where's My Refund?" — before calling, as phone support may be harder to reach, and working with a tax professional if your filing situation is complicated.
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