WASHINGTON, D.C. — The Internal Revenue Service collected a record $5.6 trillion in fiscal 2026, nearly 5% more than the previous year, while issuing larger tax refunds and expanding digital services under changes to federal tax policy enacted by President Donald Trump, according to the agency’s annual performance report.
The increase in collections came as the IRS reported a decline in average federal income tax rates across all income categories for tax year 2025. Based on individual returns filed through mid-July 2026, the aggregate average rate fell to 12.6%, approximately 4% below the previous year’s level.
The agency attributed the reduction to provisions of the administration’s Working Families Tax Cuts legislation, although the figures reflect aggregate tax outcomes rather than the effects of individual provisions.
Refunds also increased substantially during the 2026 filing season. The total dollar amount of refunds claimed rose 17% from the previous year, while the average refund increased 11%. The total value of refunds disbursed climbed more than 20%.
About 90% of taxpayers who filed electronically received their refunds within 21 days, according to the IRS.
“With our dedicated workforce, we delivered a successful tax filing season and continue to transform the IRS into a Digital-First agency,” IRS Chief Executive Officer Frank J. Bisignano stated.
The agency reported increased use of its online services as it shifted more taxpayer interactions and payment processing to digital platforms.
IRS.gov recorded more than 954 million visits during fiscal 2026, including nearly 469 million checks through the Where’s My Refund? service.
Individual Online Account enrollment reached approximately 37.6 million users, up 34% from the previous year, while account logins totaled 224 million.
Payments through individual online accounts increased 57% to more than $133.6 billion. Tax Professional Account users also increased 57%, reaching approximately 513,000, while payments through Business Tax Accounts climbed nearly 250% to $726.6 million.
The IRS introduced a mobile application during the year, recording more than 140,000 downloads in its first five days. More than two-thirds of those users selected the application’s authenticated, personalized experience.
The agency also accelerated its transition away from paper-based processing. Direct-deposit refunds increased 12%, consistent with Executive Order 14247, which directs federal agencies to phase out paper checks to reduce processing costs and fraud risks.
Under its Zero Paper initiative, the IRS reported electronically processing more than 90% of Form 940 annual federal unemployment tax returns and more than 80% of Form 941 quarterly employment tax returns.
Fraud prevention remained a major component of the agency’s operations. The IRS estimated that it protected approximately $38 billion in tax revenue from identity theft-related refund fraud during fiscal 2026.
The agency worked with state tax authorities and private-sector partners through the Security Summit to identify fraudulent filings and prevent improper refunds.
It also expanded public reporting of suspected tax violations through a new online referral system. Taxpayers can confidentially submit information about suspected tax fraud, evasion and related illegal activity through IRS.gov/submitatip.
Separately, the IRS reported progress implementing Trump Accounts, tax-advantaged investment accounts established under the Working Families Tax Cuts legislation for children younger than 18.
According to the agency, nearly 70 million accounts are open, with 27 million already receiving contributions from families, private donors or the federal government.
The program includes a $1,000 federal contribution for eligible children born between January 1, 2025, and December 31, 2028.
The IRS said it is continuing outreach to taxpayers and tax professionals to encourage participation in the accounts, which are intended to support long-term savings and investment for children.
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