The Internal Revenue Service (IRS) is facing a potential crisis for the 2026 tax filing season due to shrinking budgets and staffing shortages, according to a warning from the National Taxpayer Advocate.
In a recent report to Congress, Taxpayer Advocate Erin Collins expressed serious concern over the IRS’s ability to provide quality service to millions of taxpayers in the coming years. While the agency has made notable progress in recent filing seasons—especially following funding boosts from the Inflation Reduction Act—those gains may be short-lived if current funding levels aren’t sustained.
Progress at Risk
“The improvements we’ve seen in customer service, reduced backlogs, and faster refunds could all be reversed,” Collins said. “Without adequate staffing and stable funding, the IRS may struggle to handle basic operations, let alone prepare for new tax law changes expected in 2026.”
That year, many provisions of the 2017 Tax Cuts and Jobs Act are set to expire, potentially creating a more complex filing environment for individuals and businesses alike. At the same time, demand for IRS services—both online and in-person—is expected to rise.
Staffing Challenges
The IRS has struggled for years with outdated technology and insufficient staffing. Although recent funding allowed the agency to hire thousands of new workers and modernize some systems, Collins noted that many of those employees are still being trained. Further hiring may stall without continued budget support.
“Inexperienced staff paired with increased taxpayer inquiries could result in long call wait times, slower processing, and increased errors,” the report said.
A Call for Stable Funding
Collins urged Congress to ensure predictable, multi-year funding for the IRS, arguing that stop-and-go budget cycles prevent the agency from planning and executing long-term improvements.
“Taxpayers deserve a modern, responsive tax system,” she said. “But without proper funding, the IRS simply can’t deliver that.”
As lawmakers debate the federal budget, the fate of the 2026 tax season—and the ability of the IRS to serve over 160 million Americans—hangs in the balance
