The 2026 tax season could be a challenge for the IRS as the agency navigates a smaller workforce and continued budget cuts while implementing the tax law changes enacted by President Donald Trump.
“Buckle your seatbelts. This is going to be a bumpy filing season,” Janet Holtzblatt, a senior fellow at the Urban-Brookings Tax Policy Center, told reporters Thursday on a call.
With the opening of tax season on Jan. 26, the IRS expects to receive about 164 million individual returns in 2026, and many could be impacted by Trump’s “big beautiful bill.” The 2025 legislation included a new $6,000 deduction for seniors, and new tax breaks for auto loan interest, tip income and overtime pay, among others.
Meanwhile, the agency faced workforce cuts from Elon Musk’s so-called Department of Government Efficiency, or DOGE, and other reductions in 2025. Those cuts included 17% to 19% of “key IRS functions” for the filing season, according to a September report from the Treasury Inspector General for Tax Administration, or TIGTA, an independent federal agency.
Many critical filing season positions were exempt from the reductions in early to mid-2025. But the cuts could impact “key processing programs and customer service” going forward, the report found.
