WASHINGTON, D.C. — The Internal Revenue Service successfully processed nearly 139 million individual tax returns and issued more than 90 million refunds during the 2026 filing season despite staffing reductions and major tax law changes, but millions of taxpayers still encountered refund delays and customer service problems, according to a report released Tuesday by the National Taxpayer Advocate.
National Taxpayer Advocate Erin M. Collins, in her Fiscal Year 2027 Objectives Report to Congress, said the IRS performed better than many observers expected as it implemented new tax legislation while managing workforce reductions and leadership turnover. Yet taxpayers requiring direct assistance from the agency often faced lengthy delays and difficulty obtaining help.
By the end of the filing season, the IRS had processed about 138.6 million individual tax returns, with approximately 98% filed electronically. About 65% of returns resulted in refunds, and the average refund totaled $3,275. Nearly all refunds were delivered by direct deposit.
The report credits improvements in IRS technology systems and online services for much of the agency’s success. Taxpayers logged into their online IRS accounts nearly 121 million times during the filing season and checked refund statuses through the agency’s “Where’s My Refund?” tool roughly 346 million times, a 9% increase from the prior year.
“The IRS has been improving its technology year by year, and as long as it gets the IT right, most taxpayers file their returns and receive their refunds without delay,” the report said.
The report also highlighted persistent weaknesses affecting taxpayers whose returns require manual review or individualized assistance.
More than 14 million individual tax returns were suspended during processing for additional review, and more than one million taxpayers waited beyond the IRS’s normal processing period to receive refunds, with average delays of about 5½ weeks.
“For millions of taxpayers, the filing season was frustrating, confusing, and financially disruptive,” the report said, noting that some taxpayers depended on delayed refunds to pay for housing, groceries, and medical expenses.
Customer service performance also deteriorated on several high-volume telephone lines. The IRS received 48.1 million calls during the filing season and answered 9.9 million, or 21%, compared with a 25% answer rate a year earlier. Average hold times increased to 14 minutes from eight minutes in the prior filing season.
Some of the most heavily used lines performed significantly worse. Taxpayers calling the Installment Agreement and Balance Due line waited an average of 45 minutes and only 31% of calls were answered by a representative. The Taxpayer Protection Program line, used by taxpayers dealing with suspected identity theft issues, answered only 19% of calls and had average wait times of 20 minutes.
The report also criticized the agency’s implementation of an executive order directing federal agencies to transition toward electronic payments. The IRS issued about 4 million notices to taxpayers whose returns lacked valid direct deposit information or contained errors, but the report said the agency failed to establish clear procedures for taxpayers who required paper checks, resulting in confusion and delays of six weeks or more for some filers.
Identity theft victims continue to face some of the longest delays in the tax system. More than half a million identity theft assistance cases remained pending at the end of the filing season, with affected taxpayers often waiting nearly two years to receive refunds.
“For many low- and middle-income taxpayers, waiting nearly two years for a refund is not merely an inconvenience [but a financial hardship],” the report said.
Looking ahead, Collins outlined 11 priorities for fiscal 2027, including reducing delays for identity theft victims, easing burdens on taxpayers who need paper refund checks, improving digital asset reporting requirements, enhancing communication when refunds are suspended, and ensuring tax penalties are applied fairly and consistently.
The report also noted that the IRS has agreed to fully or partially implement 47 of the 64 administrative recommendations made by the National Taxpayer Advocate in her 2025 annual report to Congress, representing a 73% acceptance rate.
The full Fiscal Year 2027 Objectives Report to Congress is available through the Taxpayer Advocate Service at TaxpayerAdvocate.irs.gov.
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