Will the IRS be caught up with processing 2025 tax returns by April 2026 ?
No, based on current reports, it's unlikely that the IRS will be caught up with processing all 2025 tax returns by April 2026. Here's why:
Significant Staffing Cuts: The IRS has experienced substantial workforce reductions, losing over 25,000 employees in the past year, according to a report by National Taxpayer Advocate Erin Collins. This includes reductions in IT staffing (27%) and Taxpayer Services staffing (22%).
New Tax Law Changes: Upcoming legislation, such as the "One Big Beautiful Bill," is expected to introduce complex retroactive changes for the 2025 tax year, increasing the demands on the reduced workforce and potentially causing delays in processing.
Concerns
About Preparedness: Collins has warned that the IRS is behind schedule on
crucial hiring and training efforts needed to handle the upcoming tax season
effectively.
Potential
for Delays: Taxpayers may encounter longer wait times for refunds, slower
return processing, and reduced access to call center support during the 2026
filing season.
While the IRS successfully navigated the 2025 filing season, the combination of a reduced workforce and potential legislative changes creates a challenging outlook for the 2026 tax season. The National Taxpayer Advocate emphasizes the urgent need for the IRS to prioritize hiring, training, and technological modernization to mitigate potential delays and maintain taxpayer services.
Will the IRS be caught up with processing 2025 tax returns by April 2026 ?
Several reports indicate that the IRS has been facing challenges with processing tax returns and managing backlogs. Here's a breakdown:
2025 Filing Season: The 2025 filing season for 2024 returns was noted as largely successful by the National Taxpayer Advocate.
Concerns for 2026: However, several reports express concern about potential challenges in the upcoming 2026 filing season (when 2025 tax returns are due).
Workforce Reductions: A significant reduction of over 25% in the IRS workforce, coupled with a proposed 20% cut in IRS funding for the next fiscal year (or 37% considering the Inflation Reduction Act funds), is expected to impact processing capabilities and taxpayer services.
Potential New Legislation: The "One Big Beautiful Bill," signed into law on July 4, 2025, made some changes to the tax code affecting 2025 taxes and potentially adding complexity, further impacting the processing outlook for the 2026 filing season.
Current Backlogs: While the IRS has made progress in reducing the backlog of some types of returns (like original individual income tax returns), other areas, such as amended returns and Employee Retention Credit (ERC) claims, continue to have significant backlogs.
Paper
Returns and Modernization: The IRS continues to grapple with processing
paper returns, which are significantly slower to handle than electronically
filed returns. The agency is working on modernization efforts to improve
digital services and processing efficiency, but the impact on the immediate
backlog remains to be seen.
National Taxpayer Advocate Recommendations: The National Taxpayer Advocate has consistently highlighted the need for the IRS to prioritize reducing the paper processing backlog and address issues like identity theft case delays.
In
Conclusion: Given the reported workforce reductions, potential new legislation
impacting tax complexity, and ongoing challenges with backlogs in certain
areas, it is difficult to definitively say whether the IRS will be completely
caught up with processing 2025 tax returns by April 2026. The situation is
fluid and depends on various factors, including staffing levels, the
effectiveness of modernization efforts, and the volume and complexity of
returns filed. Taxpayers are advised to file electronically and utilize direct
deposit for faster processing and refunds.
Comments
This problem is not being covered by the “media”. Trump needs to quietly fix this quickly.
Norb Leahy, Dunwoody GA Tea Party Leader
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