By Zaher Fallahi, CPA, MS, MBA
Serving Clients in Los Angeles, Orange County & Nationwide
The 2026 filing season arrives with a mixture of optimism and uncertainty. Insights from the ABA Section of Taxation meeting in Las Vegas on December 12, 2025, featuring former IRS Commissioners Charles Rettig and Danny Werfel—shed light on what taxpayers can expect after a lengthy federal shutdown and continued staffing reductions.
1. IRS Resilience Amid Staffing Challenges
The IRS workforce has shrunk by nearly 25%. Yet seasoned employees who managed the 2019 shutdown and pandemic backlogs remain in place.
Result: A functional filing season, but not necessarily a fast one.
2. Transition to Digital Processing
A. Paper Refund Checks Are Ending
Direct deposit continues to expand as the primary method of issuing refunds. This reduces fraud risk and expedites delivery.
B. Electronic Payments Becoming Standard
Paper checks for tax payments are declining as Treasury modernizes its payment systems.
C. Expanded Paperless Processing
The IRS is increasing reliance on:
• Electronic filing
• Digital signatures
• Online notices
• Digital payment options
• Automated correspondence
These systems reduce manual handling but may require taxpayers to become more comfortable with digital interactions.
3. Groups Likely to Experience Longer Processing Times
Certain filings will continue to require manual review or additional verification:
• Elderly or unbanked taxpayers
• Filers with international reporting requirements
• OFAC-related matters
• Identity-theft cases
• Amended returns
• Returns requiring document matching or verification
These categories could move more slowly despite systemwide modernization.
4. Practical Expectations for the 2026 Season
• Accurate banking information is more important than ever.
• E-filing is strongly recommended.
• Automated IRS notices may increase in frequency.
• Paper and complex filings may take longer than typical.
• IRS phone support may experience longer wait times.
Summary:
The 2026 tax season reflects an IRS in transition—balancing modernization, reduced personnel, and a backlog of procedural reforms. Taxpayers who remain attentive to deadlines, digital requirements, and IRS correspondence will be best positioned for a smooth filing experience.
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