Tax Season Headaches Ahead: IRS Staffing Cuts and New Laws Threaten Refund Delays

American taxpayers gearing up for the 2026 filing season should brace for potential delays and confusion. The Internal Revenue Service, already grappling with the implementation of a major new tax law, is now facing these challenges with a significantly reduced workforce, setting the stage for a difficult tax season.

Staffing levels at the IRS have plummeted by 27% compared to 2025, a result of layoffs and buyouts. Compounding the operational strain is unprecedented turnover at the top; the agency has seen seven different commissioners in 2025 alone, a role typically held for a five-year term. The current interim leadership, Scott Bessent and Frank Bisignano, also juggle responsibilities at other federal departments.

"The brain drain is real and concerning," said Janet Holtzblatt, a senior fellow at the Urban-Brookings Tax Policy Center. "The loss of institutional knowledge, especially in management, comes at the worst possible time."

That "worst time" is the rollout of the "One Big, Beautiful Bill," which enacted over 100 changes to the tax code in July 2025. While some provisions offer new breaks—like excluding certain tips from federal income tax and a deduction for interest on some car loans—they come with complex eligibility rules. For instance, the tip deduction applies to fewer than 3% of filers, and the auto interest deduction has strict domestic assembly requirements.

Training the remaining staff on these intricate changes was further hampered by a prolonged government shutdown last year. "The combination of new laws, a digital payment transition, and fewer experienced hands could create a bottleneck," Holtzblatt added.

The consequences extend beyond mere inconvenience. For many households, tax refunds are a crucial financial lifeline. Delays can strain budgets amid persistent cost-of-living pressures. On a macroeconomic level, sluggish refund processing can blunt the intended stimulative effect of tax policies, slowing the flow of funds into the economy.

How to Protect Your Refund

Despite the headwinds, experts emphasize that proactive taxpayers can still ensure a relatively smooth process. The universal advice: file electronically and opt for direct deposit. The IRS is actively moving away from paper checks, and providing bank account details can shave weeks off refund times.

"Direct deposit isn't just a suggestion this year; it's essential for speed," said enrolled agent Kesha Dawson Harris.

With customer service lines stretched thin—the agency has 1,000 fewer service reps than planned—taxpayers are urged to use online resources first. "Start with the IRS website and tools like 'Where's My Refund,'" advised Philip Hwang, chief tax officer at Optima Tax Relief. "If you must call, use the callback feature and call early. Don't expect a quick answer during lunch."

Free in-person help remains available through the IRS's Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) programs for qualifying individuals.

In a recent report to Congress, National Taxpayer Advocate Erin M. Collins summarized the daunting task ahead: "The IRS is simultaneously confronting a 27% workforce reduction, leadership turnover, and the implementation of extensive and complex tax law changes... many of which apply retroactively." The accuracy of filed returns, she noted, will be the season's biggest hurdle.

Voices from the Public

Michael R., a small business owner from Ohio: "It's frustrating. We play by the rules, file on time, and now we're told to expect delays because the agency is understaffed? It feels like we're being penalized for their shortcomings."

David Chen, a CPA in Seattle: "The new laws are a minefield of nuances. My advice to clients is to be meticulous with documentation, especially for the new deductions. One error could trigger a lengthy review process this year."

Sarah Gibson, a teacher from Florida: "I rely on my refund for summer expenses and catching up on bills. This news is stressful. I'll be filing the minute my documents are ready and crossing my fingers."

Linda Forsyth, a retiree from Arizona: "It's sheer incompetence and chronic underfunding. They demand perfection from us but can't manage their own house. Why is the public always the one to suffer for bureaucratic failure?"