Why getting it right on your income-tax return is more critical this tax season.
The Internal Revenue Service is facing hurdles in its ability to properly handle the 2026 tax-filing season amid substantial workforce cuts, missing hiring goals and a tax system loaded with additional rules.
That’s according to findings from two distinct watchdogs this week – the Treasury Inspector General for Tax Administration, and the IRS National Taxpayer Advocate.
The worst part is that, following a record-breaking shutdown that ended in November of last year, their warnings failed to account for the potential consequences of another U.S. government closure.
Another shutdown currently seems quite possible but might be very short, according to analysts. It will probably conclude by the middle of next week, said Tobin Marcus, head of policy and politics at Wolfe Research, after a potential breakthrough Thursday on Capitol Hill.
The federal government’s tax collector was staring at a financing lapse starting at 12:01 a.m. Only a few days after it began processing income-tax returns for 2025, on Saturday, Eastern time. That’s also just as Americans are relying on significantly greater refunds starting to enter their bank accounts.
For the time being, the IRS has a backup strategy to prevent shutdown effects: The agency is going to use Biden-era cash to pay for all of its workers until Saturday, Feb. 7, according to a lapse plan given by Melanie Lauridsen, vice president of tax policy and advocacy at the American Institute of CPAs.
The Treasury Department did not immediately respond to a request for comment.
A clear reality is highlighted by the IRS’s backup funding plan: Even a temporary closure is the last thing it needs. If the shutdown carries on longer, it could be another burden for the agency – and, ultimately, for taxpayers.
During a shutdown, the IRS should be able to continue processing tax returns and issue refunds by maintaining full staff. If a tax return is basic and error-free, tax filers should still expect a smooth journey ahead – and that includes obtaining any refund on schedule, according to experts.
But if customers have concerns for customer support or worry about possible issues with their return, they should brace themselves for longer hold periods and the likelihood of unanswered questions.
This all means it’s extremely vital to get it right when submitting your tax return today, experts say, especially if you want your refund on time. “If there’s anything wrong with your tax return – a missing digit in your Social Security number, or you don’t provide enough information about a deduction, or something the IRS has to question – it just means it will slow the processing of that return, for sure,” said Matthew Lee, a partner at Fox Rothschild who represents clients with tax-related issues, including audits. “Even if it’s a temporary shutdown, it couldn’t come at a worse moment for this agency,” Lee remarked.
Six of 12 federal financing legislation still need to be adopted, including the one for the IRS. The potential partial government shutdown is tied to a face-off over financing for the Department of Homeland Security after federal authorities shot and killed Minneapolis homeowner Alex Pretti last week.
President Donald Trump secured a deal with Senate Democrats to keep the government running through September while granting interim financing for the Department of Homeland Security as negotiations continue. The Senate passed the accord on Friday evening, while the House of Representatives is slated to reconvene Monday.
Lauridsen and her organization, the American Institute of CPAs, was hoping for the IRS to continue working completely. “We are gravely worried that taxpayers and practitioners may encounter considerable harm and enormous problems if the IRS runs during the current filing season with a fraction of its workforce,” a Thursday letter from the association said.
IRS staff fell to around 74,500 in December, signifying a 27% decline from January 2025, according to the National Taxpayer Advocate’s report Wednesday. Many of those retiring personnel had years of institutional knowledge that was tough to replace, the research stated.
According to the reports this week, the agency’s filing season preparation was also hampered by the shutdown last autumn. The IRS expected to hire roughly 3,500 customer-service agents for the filing season “but it fell over 1,000 employees short,” the National Taxpayer Advocate report observed.
IRS staff is “already understaffed and overworked,” said Thad Inge, vice president of Van Scoyoc Associates, a Washington-based government-affairs firm, where he specializes on tax administration and tax policy.
Further strains coming from furloughs would compound the issues, he warned. “It’s up to the administration what kind of a picture they want to paint” in the public perspective of a shutdown, Inge said, adding that it’s hard to see how the Trump administration could profit in the public eye from tax-filing delays.
Tax filing should go simply for most people, but difficulties arise when anything goes wrong and it’s tough to get help from the IRS. “That’s the nightmare scenario – that those things just happen more frequently and become more exacerbated when the agency is not firing on all cylinders,” Inge stated.
To be clear, there are no new tax filing deadlines as a result of the closure. Americans still need to file a return or request an extension by April 15 in order to pay their taxes.
How long any partial shutdown lasts and what happens if it continues until next week are important questions.
Former IRS Commissioner Charles Rettig told MarketWatch on Tuesday that, in general, all IRS employees with filing-related responsibilities will keep working unless they are exempt. The agency’s personnel is resilient and recognizes the necessity of having a successful filing season, he said.
Rettig commanded the agency during the second-longest government shutdown, which terminated days before the 2019 reporting season. Then he had to temporarily suspend IRS operations in the thick of the 2020 filing season as the pandemic tore through the country.
The great majority of tax returns are filed electronically and processing inside the IRS is essentially automated, he said. Processing for a smaller pool of returns that cannot be handled automatically would probably be slowed considerably by a shutdown.
The IRS had to manage with significant backlogs because of the pandemic. A longer shutdown might produce a buildup now, said Rettig – though the agency’s ability to handle records and stacks of paper has substantially improved from even a few years ago, he observed.
According to the Treasury Inspector General for Tax Administration report released on Monday, the inventory of unfinished paperwork and delayed returns has already been growing due to the record-long October shutdown and reduced workforce. In December, the backlog of processing returns and correspondence reached 2 million, up from 1.5 million the previous year.
The backlog that isn’t cleared will be carried into the current filing season, the study added, which may feed into delays processing returns and paying refunds.
Delayed refunds annoy taxpayers. If the wait is too long, they cost the federal government, because the IRS has to pay interest on the overdue refund. Last year, the government paid $2.6 billion in interest, the Treasury Inspector General report revealed.
In the past year, Fox Rothschild’s Lee has observed it grow harder to receive IRS responses and get someone on the phone. When he calls now, he plans for at least a 30-minute wait, if not an hour or more.
The rationale is simple, he said: “Fewer people on the other side.”
