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Taxpayers are slated to receive substantially larger refunds this filing season, but many may wait longer than usual — and face bumpier customer service — as the Internal Revenue Service operates with a much-reduced staff. The contrast between bigger checks and fewer front-line workers is shaping up to be the headline issue for 2026 filings.
Why bigger refunds are arriving
New provisions in legislation passed last year — including changes to how overtime, tips and the child tax credit are treated — mean the typical refund this season will be noticeably larger than a year ago. Analysts at the Tax Foundation estimate the average refund will rise to about $3,800, up from roughly $3,052 in the prior tax year, a jump of nearly $750.
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One practical reason: the IRS did not direct employers to immediately change withholding amounts, so taxpayers are more likely to see the effects of the new rules when they file rather than through smaller paychecks during the year.
Staffing shortfalls threaten speed and service
The agency faces a much smaller workforce entering the season. According to the annual report from the office of the National Taxpayer Advocate, the IRS’s staff level dropped by about 27% over the last year — from just over 102,000 workers to about 74,000 — and roughly one in five customer-service representatives left during that span.
That loss is not purely numerical, the Advocate’s report noted: many of the departures were experienced, long-tenured employees whose institutional knowledge is hard to replace. Former IRS officials and independent analysts say that combination of complex new tax rules and fewer seasoned staff creates a clear risk of delays and increased demand on support channels.
Garrett Watson, policy director at the Tax Foundation, said the recent warnings highlight tangible vulnerabilities this season, particularly as the agency adjusts staffing and workflows. He emphasized that routing employees from non-tax units into filing-related roles would require training and time — both scarce resources once filings peak.
What taxpayers should expect
- Longer wait times: Phone and online help could take longer as fewer trained agents handle spikes in questions.
- Slower refund processing: Larger refunds do not guarantee faster delivery; back-office capacity will determine timing.
- Greater chance of corrections: Less-experienced staff working unfamiliar tax issues may lead to more amended returns or follow-up correspondence.
- No easy alternative: The IRS’s in-house Direct File option has been discontinued, removing a free, streamlined filing route for eligible taxpayers.
IRS insiders have told reporters that, while it is still early in the filing period, the combination of staffing churn and new, technically detailed tax provisions tends to produce more taxpayer contacts and more complex casework. That dynamic typically falls hardest on phone support and manual review queues.
Agency response and outlook
The Treasury and the IRS have said they prepared updates to forms and guidance in advance of the new rules. Treasury leadership expressed confidence that filings will proceed smoothly, calling prior preparations thorough. Former IRS commissioner Danny Werfel noted there are “positive signs” in the initial guidance released for areas such as tips and overtime, but he warned that applying guidance to real-world tax questions often drives a surge in calls — and that is where service quality will be tested.
The National Taxpayer Advocate also pointed to lingering effects of pandemic-era disruptions — a period that left the agency with backlogs, major shifts to remote work and heavy demand for relief payments — as a factor that continues to complicate operations.
For taxpayers, the takeaway is straightforward: refunds may be larger, but patience will likely be required. Expect slower response times and a greater chance of follow-up from the IRS as staff work through a compressed workload while adapting to new rules.
