Filing Season Opens as the Biggest Test of a Smaller IRS
Senators warned that a workforce down more than a quarter could struggle with a season complicated by new deductions, no Direct File option and phone support that has been under strain for years.
The 2026 filing season opened this month with an agency that has lost more than a quarter of its staff, a tax law whose provisions applied retroactively to the year being reported, and no government-run free filing option for the first time in three years.
Members of the Senate Finance Committee described it in advance as a substantial test, and the tax preparation industry braced for a volume of questions it had not seen in years.
Three sources of complexity
Retroactive provisions. The law enacted in mid-2025 applied to the entire tax year, which means withholding across that year did not match the final liability. Millions of taxpayers were owed more than usual, and many did not know why.
New deductions with substantiation requirements. The tip and overtime provisions depend on employers reporting amounts that many payroll systems were not built to isolate. Workers whose employers did not report correctly must document the amounts themselves.
A larger state and local tax deduction. The higher cap changes the itemize-or-not calculation for a substantial number of households in high-tax states, many of whom had stopped itemizing entirely.
What the agency is relying on
The IRS entered the season with a strategy of automating everything that can be automated and accepting degraded service on everything that cannot. Electronic filing, refund processing and automated matching absorbed the volume as designed.
Phone service was the pressure point going in. Internal assessments before the season indicated the agency would need thousands of additional hires simply to maintain prior-year phone support levels — hires that did not happen.
For taxpayers, the practical advice
File electronically with direct deposit, which routes around every part of the system under strain. Expect long waits for any matter requiring human review. And check that reported tip and overtime figures on year-end statements match records, because correcting an employer's reporting after filing is the slowest process the agency operates.
