this IRS Has started 2026 tax return But a new regulator memo suggests the agency may face operational pressures in the coming months. The IRS is starting the quarter under pressure from layoffs, massive backlogs and technology delays, according to Forbes.
In a recent memo, the U.S. Treasury Inspector General for Tax Administration (TIGTA) warned that tax filing season would begin under “stressful conditions” due to reduced staffing, delayed hiring and training, and incomplete modernization efforts. The IRS expects to receive approximately 164 million individual federal income tax returns for the 2025 tax year before the April 15 deadline.
Backlog remains well above normal levels
According to TIGTA, as of December 2025, there were approximately 2 million individual returns in the IRS inventory, including amended returns, paper returns and taxpayer letters. This number is 129% higher than pre-pandemic levels.
Also read: IRS “Where’s My Refund?” Tool: How It Works and When You Can Check Your Refund Status
The backlog includes more than 500,000 amended returns and nearly 300,000 paper returns. TIGTA warned that these delays pose a “significant risk” of slower processing and refunds during the 2026 application season, potentially increasing the government’s interest costs on delayed refunds.
Staff shortages and slow hiring
These challenges are exacerbated by a shrinking workforce. As of October 2025, after funding reversals and internal reductions, the IRS’s overall staffing is reduced by approximately 19% to approximately 19,000 employees.
Staffing in the submission processing unit responsible for processing original and revised returns has been reduced by 17% compared with October 2021.
Although the Internal Revenue Service (IRS) was authorized to hire 2,200 employees for the 2026 filing season, only 50 employees had been hired as of late December 2025, according to TIGTA.
Training can take 60 to 80 days, which means many employees may not be fully prepared during peak application times.
Also read: 2026 U.S. Tax Refunds: How to Check IRS Refund Status? Steps to monitor progress
There are issues with service levels and technical readiness
The IRS plans to lower its telephone service level goal from 85% in recent years to 70% in 2026. TIGTA noted that the agency has not reached 70% service level since 2022.
The memo also noted an approximately 16% reduction in IT staffing, raising concerns that critical system updates may not be fully tested before application season begins.
While modernization initiatives are underway, TIGTA warns that many improvements will not be implemented in time this year to materially improve the taxpayer experience.
