Taxpayers should brace for delays in refunds, the IRS watchdog warned, as the agency recovers from staff losses and a long government shutdown last fall.
The backlog for processing tax returns has jumped 129% to levels higher than inventories before the pandemic, the Treasury Inspector General for Tax Administration said in a report released Tuesday. This pileup could impede the IRS’s ability to process tax returns for the 2026 filing season, which started Monday.
“This could result in delays in taxpayers receiving refunds and could result in the IRS paying interest,” the watchdog said. The IRS in 2025 paid more than $2.6 billion in interest to individuals as of the end of November.
The IRS also is adjusting its goal for the level of service on telephone responses to 70% from 85% compared to last year, though IRS CEO Frank Bisignano said the IRS is revamping some of its metrics on some service levels.
The government shutdown and length of training for new hires also could thwart the IRS’s ability to be ready for the tax season, the watchdog said. The IRS onboarded about 2,300 employees in positions critical to filing season late in 2025, short of its 3,500 goal, according to TIGTA.
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