IRS watchdog warns American taxpayers may face 'greater challenges' amid recent issues
As tax season kicked off this week, the Internal Revenue Service (IRS) is set to process millions of returns for taxpayers, but an internal watchdog has warned that the process may not be as smooth as last year. The National Taxpayer Advocate has warned that some taxpayers may face "greater challenges" as the IRS deals with new rules amid a workforce crunch, following a mass exodus of workers since the start of Donald Trump's administration. Although officials have assured that proceedings will be smooth, several other watchdogs have also raised similar concerns, ABC News reported.
On Wednesday, National Taxpayer Advocate Erin M. Collins released her annual report, two days after the start of the 2026 tax filing season. She highlighted that while the IRS was able to process returns in 2025 without major disruptions, “entering 2026, the landscape is markedly different.” Last year, the IRS had the largest workforce and no major tax law changes, which enabled it process over 165 million individual returns smoothly, with most filers getting their funds timely.
However, in 2026, Collins noted that the agency is confronting a 27% reduction in workforce, leadership turnover, and the implementation of extensive and complex tax law changes implemented by the Trump administration's One Big Beautiful Bill Act. Moreover, in 2025, the IRS trimmed its workforce by 74,000 workers after a series of firings and layoffs brought on by the Department of Government Efficiency. While workers in the 2025 tax season were not allowed to accept a buyout offer from the Trump administration until after the taxpayer filing deadline, this year, a chunk of those customer service workers have left, ABC News reported.
Collins added that the 2026 filing should be "seamless" for taxpayers who file electronic returns. Such filers should expect error-free returns with direct deposit of refunds, but she cautioned that “the success of the filing season will be defined by how well the IRS can assist the millions of taxpayers who experience problems.” Other IRS watchdogs have also outlined similar major concerns. Deputy Inspector General for Audit at the Treasury Inspector General for Tax Administration, Diana M. Tengesdal, wrote a letter to IRS leadership on Monday pointing to the IRS staffing levels of 2021, where thousands of returns went unprocessed. Tengesdal's office noted that despite efforts to modernize tax administration, “initiatives to offset staffing losses may not yield expected benefits during the 2026 Filing Season," the publication reported.
However, IRS Chief Executive Officer Frank Bisignano assured earlier in January that “The Internal Revenue Service is ready to help taxpayers meet their tax filing and payment obligations during the 2026 filing season,' per CNBC. Bisignano announced last week that new priorities and a reorganization of IRS executive leadership had been executed and that he is “confident that with this new team in place, the IRS is well-prepared to deliver a successful tax filing season for the American public.”
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