IRS Tax Refunds Arrived on Time Despite Staff Cuts—Experts Watching 2027
Summary
The IRS managed to send out most tax refunds on time in 2026 despite big staff cuts and many tax law changes under President Trump’s new tax bill. However, experts warn that the agency faces problems ahead, especially with fewer workers available to help taxpayers who need assistance.Key Facts
- The IRS workforce dropped by about 27-28%, losing around 28,000 employees since last year.
- The agency processed 138.6 million tax returns and issued 90.4 million refunds in 2026, both higher than in 2025.
- Nearly all tax returns (98%) were filed electronically, allowing more automation to handle returns smoothly.
- The new tax law, called the One Big Beautiful Bill Act, caused over 100 changes to the tax code and led to unusually large refunds.
- Staffing cuts led to longer wait times for help, with the average phone hold time rising to 14 minutes from 8 minutes in 2025.
- The IRS did not do its usual seasonal hiring to support the busy tax season in 2026.
- Experts warn that challenges will get worse in 2027 if the IRS does not prepare for more tax law changes and fewer workers.
- The agency faced delays in answering taxpayer questions and resolving complex issues because of fewer experienced employees.
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