Tax Filing Season Is Underway: Here’s How It’s Going So Far

There are about five weeks left in tax filing season — the busiest time of year for the IRS and tax preparers.

IRS CEO Frank Bisignano told lawmakers earlier this month the tax season has so far been a success, with quick refund turnaround times and a shrinking backlog. That is despite a tumultuous 2025 for the agency, when the IRS lost about a quarter of its workforce to resignation offers, began implementing the GOP’s new tax-and-spending law, and managed the fallout of the longest government shutdown in US history.

Tom O’Saben, director of tax content and government relations at the National Association of Tax Professionals, said tax preparers also aren’t hearing a ton of complaints from clients either.

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On this episode of Talking Tax, O’Saben joined Bloomberg Tax reporter Erin Slowey to discuss how filing season is going, the impact of changes from the 2025 law, and what to do if you don’t have the money to pay taxes by the deadline.

“Don’t put your head in the sand and say ‘I know I am going to owe so I am just not going to file,’” O’Saben said. “That’s a bad idea.”

Do you have feedback on this episode of Talking Tax? Give us a call and leave a voicemail at 703-341-3690.

This transcript was produced by Bloomberg Law Automation.

David Schultz:

From Washington, I’m David Schultz, and this is Talking Tax.

All right, so we’re in the midst of another tax filing season. How’s it going? We’re putting that question today to Tom O’Saben, an enrolled agent and the director of tax content at the National Association of Tax Professionals. He says this is a sort of tricky year because of all the changes from last year’s Republican tax and spending package, also known as the One Big Beautiful Bill Act. Everyone knows about the changes involving overtime and tips, but O’Saben says the law made other changes that aren’t getting a lot of attention. He spoke with Bloomberg tax reporter, Erin Slowey, and she started off by asking him about what the biggest challenges have been for tax pros this year.

Tom O’Saben:

You know, we talk about the concerns about the provisions under the One Big Beautiful Bill, you know, with how to handle the tip deduction, the overtime deduction. What really kind of came out of left field is dealing with energy credits in 2025. Now, we know that the One Big Beautiful Bill basically made the energy credits for electric vehicles, for example, end on September 30th, and pretty much the other energy credits that the typical taxpayer would do, new exterior windows, doors, a new furnace, air conditioner, those types of items ended on December 31st. Never before in all the years we’ve had energy credits did we have to get something called a Qualified Manufacturer’s ID number, called a QMID. And in addition to that, in filing a return, there has to be a receipt attached via a PDF, for example, to an electronically filed return. Again, that came completely out of left field, had not seen that before. And I’ll be honest with you, the first time I saw it is when a diagnostic on my software said, in order to claim this credit, we need a QMID and also a copy of the receipt. So that, again, was kind of the left field, didn’t make much splash in the media other than energy credits ending, but anyway, has thrown us at a loop for people who are looking at perhaps anywhere between a $600 to $2,000 credit. And we love credits because they’re a dollar-for-dollar reduction in tax. So we don’t want to avoid them, but at the same time, this last year, last go-around, they need more documentation to support the credit we’re applying for.

Erin Slowey:

How difficult is it really to get this ID number? Are you seeing a lot of people try and claim this on their tax returns?

Tom O’Saben:

I have probably had a dozen or so. So it’s fairly active. I would say I’ve had more energy credits than I’ve had tip deductions. So it has been popular in my part of the world. I mean, I know demographics are always different, but not knowing about them was probably the more important thing. And they typically aren’t listed on the receipt that the taxpayer received when they bought a new furnace or an air conditioner or windows or doors. And an interesting one that I ran across, I’m going to be doing another thing next week, and that were Marvin Windows. That’s a big, big window company. Not quite as popular as Andersen, but right up there. They specifically say on their website that we did not participate in the energy saving program. So we don’t have a QMID. What’s the translation? You don’t have a tax credit for Marvin Windows. That says it right there on their website. So that was an interesting education. And what I try to do when I’m meeting with a client, I think this is an important takeaway for people who do their own returns or go to a professional, using the resources. So you’re an informed consumer. When a client sits here in my office, I’ve got a separate monitor that they can watch right along. A client and I went to that Marvin Windows site together. We both discovered that fact together. So it wasn’t hearsay or my brother-in-law said.

Erin Slowey:

You mentioned tips and the one big, beautiful bill. I know the IRS CEO last week talked about how over half of the returns that were filed as of now have tips, overtime, some of these flagship provisions from the law in it. Does it surprise you at all that a lot of the early returns getting filed have those claims to them?

Tom O’Saben:

You know, Erin, it doesn’t surprise me. And what has really been helpful and what has surprised me somewhat is the employer’s willingness to provide as much information as they can to the taxpayer. I really expected something along the lines of really having to dig, setting another appointment, having to get pay stubs or other reports to try to get this information. And I think employers have done a really, really good job of providing that information. I’m seeing a lot of, they’ll use all different kinds of code, but in codes, but in box 14 of the W-2s, it’ll say something like, OBBB, OT premium, or it’ll say overtime premium, you know, and that’s been nice to see. In many cases with tips, it’s been the same thing, whether it’s disclosed right there on the W-2. Of course, we have to ask more questions. Does this represent all of the tips? Can we necessarily assume that the calculation that was done and reported on the W-2 is accurate? Well, we’re gonna use the old phrase, trust but verify. So I think one of the things that I’ve suggested to tax professionals and to taxpayers is we always send out an organizer in advance of an appointment or a drop-off or whatever it might be, and we’ve got that right there on the organizer that if you had overtime or you had tips, be aware of the fact that, you know, we’re gonna need final year pay stubs or whatever it is to back into that. Some of them we’ve had to do a calculation. There’ll be a bucket, you know, that we’ll see overtime, and, you know, it’s not the whole amount that’s in there. It’s only that premium amount. We used the example of someone who makes $20 an hour, and in overtime, they make $30 an hour. It’s only that $10 based on a 40-hour work week that’s eligible for the deduction. So there’ll be more stringent guidelines in 2026, but 2025, the pain points haven’t been as bad as I was fearing or we were fearing at NATP, so I’ll put some kudos out there to taxpayers becoming informed and businesses, employers, and the payroll services doing a pretty good job of providing that information.

Erin Slowey:

What are your thoughts on how the IRS is doing so far this tax filing season? They lost a ton of people this last year, and they had that law passed over the summer, making adding – just adding to their workload. Like, how do you think the agency is doing as of now?

Tom O’Saben:

I have to say, I think they’re doing a great job. I mean, in terms of the amount of information they’re making available to the public to help them guide their way through these various provisions, given the fact that we also had a historic government shutdown period, the current one we’re under, which is kind of just limited to the Homeland Security budget, really isn’t impacting the IRS. I’ve avoided having to call for a long time, but there was a situation where I needed to call, and I follow the rules. I tell people, don’t call on a Monday, don’t call on a Friday. I actually called on a Tuesday afternoon, needed to work out a payment plan for a taxpayer. I was on the phone for about 10 minutes, and I have to tell you, it was an enjoyable experience, if we can say that, in dealing with our tax obligations. So I say kudos to what the service has been able to do with their limited resources. They seem a lot more nimble. The person on the phone was very gracious, very kind. Can I help you with anything else? You know, that kind of a thing. And I’d like to put some compliments out there. And the resources that IRS is providing, whether it be on a daily basis or a weekly basis, they’re doing a good job. We get the opportunity to have a monthly meeting with the IRS. It’s called the National Public Liaison. And we’ve shared a lot of information about how they can really emphasize the third name in their name, which is service. And they’ve really taken that stuff to heart, even with a huge number after the DOGE recommendations and everything, and all of the people who took early retirement. I think with all of the negative going around, the IRS has done a good job so far this filing season. And I’ll tell you one other thing, Erin. I’m not hearing any complaints from taxpayers. And that probably means that refunds are coming out about when they’re expected. You know, we want to manage expectations and go with that IRS guidance that says, from the time your return is accepted, give it about 21 days. Could happen faster. Everybody’s happier if it comes faster, but we’re not so happy if it comes later. So apparently they’ve been doing a good job so far this filing season.

Erin Slowey:

I know we had heard also that the IRS was moving some people around from HR and IT to help out with filing season. I don’t know if you saw that and if you had thoughts of kind of that idea of surging employees who maybe don’t have experience dealing with taxpayer’s information, now helping out.

Tom O’Saben:

That’s a, I would tell you that is a common practice at the IRS. They do move resources from different areas, mostly to answer the phones. That does concern me because, you know, many, many times I’ll be dealing with a client and they’ll say, well, that’s not what the IRS said to us. And I’m like, well, I don’t know that we can always count on the answer and it may be the way you ask the question, you know, to get that answer. But that does concern me, Erin, when we have people that maybe, like you said, there are normal type of business operations with an IRS, like you mentioned. IT, human resources, could be marketing or other areas that don’t know a darn thing about taxes. And I’m hoping that if in fact they run into questions that seem beyond them, that they have a means to be able to elevate that question to the season personnel. But I guess what the main thing they’re trying to accomplish is to get the wait times down.

Erin Slowey:

Another thing that the IRS CEO talked about in his hearing on the Hill was getting the amended returns processing backlog down and shortening how long that takes. Can you talk a little bit about like why that getting that backlog slim is important?

Tom O’Saben:

Sure. I will tell you, and that is a real pain point. I avoid any way I can filing amended returns. Sometimes it’s necessary. But in this day and age, one of the issues happens to be that there’s very, very late receipt, sometimes a brokerage statements or K-1s if someone is in a partnership. I would rather file an extension than file an amended return because I was told one time by a representative at the IRS that even though we now have the means to electronically file amended returns, all we’ve really done is eliminate the mail time that actually on the other end, it’s no different than attaching something like a PDF to an email. Someone at the IRS still has to download that and process it manually. And then they have to understand is it in good form? The average processing time for an amended return has been anywhere between six to eight months, not weeks, but months. And even worse in the understanding, and that could be going back to having perhaps less seasoned personnel, less trained personnel dealing with what is called a superseding return. For example, let’s say I file your return today and it’s been accepted by the IRS and then tomorrow you get another W-2 or something that you didn’t expect. Well, if we file, we don’t have to file an amended return. We can actually file a superseding return, which looks a lot like an amended return. But the idea is to say, you know that original return? Take that out and put this one in. That seems to be rocket science on the other end and their ability to be able to handle that. It’s like they’re seeing two returns and don’t understand what to do with it. That has been a maddening experience. So when they talk about the inventory, they’re probably talking about the date it’s been open or how many days it’s been open. Well, those days are turning into weeks, turning into months. So I will say this, and this might be a takeaway for folks as we look at the filing deadline. I find it’s hard to believe it’s literally about four weeks away. If you don’t have everything, try to get a pretty good idea of your tax liability. If you owe, send some money in with an extension. I would file an extension versus filing with what you’ve got and then trying to go back and amend. I think that’s going to be a much more painful experience. But it’s important to understand that an extension is in time to file, not in time to pay. So you want to maybe pad that payment you might make on April 15th a little bit so that if you finally get your documentation, I think of a couple of clients, they never received their final K-1s until the summertime, and we know that. So we get some kind of information as we can and we plan accordingly, get enough money paid in by April 15th so we can file an original return when they get that information rather than doing an amended return.

Erin Slowey:

And another thing that’s different maybe with this tax filing season is direct file, the IRS’s free filing tool is no longer an option. Has that impacted you at all and what does that mean for taxpayers and taxpayers potentially?

Tom O’Saben:

Well that’s another good question. I always say that people should be able to file their own returns. They shouldn’t have to use a professional. And the direct file program that the IRS had come out with seemed to have been a pretty good pilot. We still have free file, which is the arrangement basically that the IRS has with a couple of big time software companies in that arena. So I can only say, I don’t know that I can give you an exact statistic, but it just seems like I’m getting outreach from email, phone calls every day for people looking for someone to do their taxes. So I believe that probably a part of that is the inability of them to use the direct file system that the IRS had.

Erin Slowey:

And then so I guess my last question for you is like kind of four weeks left, like what are you watching for, thinking about kind of as we head to the end of that season, even though I know it kind of goes a little bit longer?

Tom O’Saben:

No, I mean, that’s a fair question. My concerns are the same as they were at the beginning. Before you go ahead and file your return, make sure that you’ve got everything. Well, how do we do that? How do I do that? You know, I’ve done it for 35 years. The first thing I want to look at is I’m going to look at last year’s return, even though I know there’s new rules in 2025, but there are some commonalities like think about where did you work last year? Did you possibly have a situation where you collected some unemployment? Or did you have a child that was born last year? Or did you buy a car? Did you do any work on your home? All of that and kind of getting all of your ducks in a row before you file, because we get kind of into that crunch season. And I will tell you right now that I have never filed my own return on April 15th. I just know that’s going to be a bad idea. If you can, choose direct deposit. You know, that’s another point that I’ve had to educate a lot of people this year. In fact, you would expect it would be an older person. When I was a young guy, he says, you got to be kidding me. I like to get that check and I like to hold it. Well, I said, you can’t anymore. You’re going to have to just enjoy looking at that number in your bank account, because we know we’ve got the executive order, which says Treasury does want to issue checks anymore. They don’t want to accept checks for payment. They probably will, but on the refund side, if there’s no direct deposit information that’s sent in with the return, what’s going to happen is in about that normal processing time, that four to six weeks, when they think there’s a check in the mail, they’re going to have a letter. And the letter is going to say, what do you want us to do? And that’s going to delay that process even more. And you’re going to be very, very upset. Now you’re looking at eight to 12 weeks to get that check just because you want to hold it. So be prepared to use direct deposit. And one other thing I’d like to throw in, what if you don’t have the money on April 15th? I always tell people, file your return. The IRS will work with you on an installment plan, for example, which is a payment plan. Perhaps they can do an offer in compromise, which if they look at your overall situation, maybe they can settle it for less than what is owed, or maybe even make it currently uncollectible. But the first thing we’ve got to do is we’ve got to file that return. They’re very willing to work with you if they can see the numbers that are behind what the current circumstance is. So don’t put your head in the sand and say, I know I’m going to owe, so I’m just not going to file. That’s a bad idea.

David Schultz:

That was Tom O’Saben, Director of Tax Content at the National Association of Tax Professionals, speaking with Erin Slowey. And that’s it for today’s podcast. You can find up-to-the-minute news on the latest tax accounting developments at our website, news.bloombergtax.com. That website, once again, is news.bloombergtax.com.

Today’s episode is produced by myself, David Schultz, and our editor was Martha Mueller Neff. From Washington, I’m David Schultz. Thanks for listening.