The Treasury Inspector General for Tax Administration (TIGTA) has released a memorandum outlining concerns about the IRS’s readiness for the 2026 filing season. Citing staffing reductions and growing inventories, TIGTA suggests the filing season could be challenging—a concern shared by many tax professionals.

This week the IRS opened the 2026 tax filing season and began accepting and processing federal individual income tax returns for tax year 2025. The agency expects approximately 164 million individual tax returns for tax year 2025 to be filed ahead of the April 15 federal deadline.

The purpose of TIGTA’s review is to identify operational risks that could affect the IRS’s ability to process tax returns, issue refunds on time, and provide adequate service to taxpayers. TIGTA’s assessment makes clear that the filing season will begin under strained conditions, shaped by large processing backlogs, reduced staffing, hiring and training delays, and incomplete modernization efforts.

As of December 2025, the IRS reported approximately two million individual tax return items in inventory, including amended returns, taxpayer correspondence, paper-filed returns, rejects, and unpostable transactions. If that number sounds big, it is. Inventory levels as of December 2025 were 129% higher than pre-pandemic levels.

According to TIGTA, the size of the inventory reflects the effects of operational disruptions over several years, including the pandemic and the record-setting federal government shutdown that lasted from October 1 through November 13, 2025. The backlog now includes more than a half-million amended tax returns and nearly 300,000 paper returns. (These numbers do not include corporate, partnership, or other non-individual returns.)

TIGTA warns that these backlogs pose a substantial risk of delayed return processing and refunds during the 2026 filing season, which, in turn, may expose the government to significant interest costs. In recent years, the IRS has paid billions of dollars in interest on delayed refunds.

(You can read more here about the post-shutdown backlogs.)

IRS staffing shortages have compounded inventory challenges. As of October 2025, overall IRS staffing levels had declined by roughly 19%, or about 19,000 employees, thanks to Department of Government Efficiency (DOGE) cuts and Congressional clawbacks of billions of dollars in Inflation........

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