IRS Chaos: Workforce Slashed, Tax Delays Loom

A yellow warning sign indicating a crisis ahead — TAX SEASON IN CRISIS

The new tax season opens with a reduced IRS workforce, sparking concerns about service delays and filing complexities.

Story Highlights

The IRS will start accepting 2025 tax returns on January 26, 2026.
New tax laws from the “One, Big, Beautiful Bill” bring changes to deductions and reporting.
The IRS workforce has been reduced by over 25% since the Biden administration.
Concerns arise regarding the IRS’s ability to handle the new filing season efficiently.

Opening of the 2026 Tax Season

The Internal Revenue Service (IRS) has announced that it will begin accepting 2025 federal individual income tax returns on January 26, 2026, officially inaugurating the 2026 tax season.

This change comes alongside the implementation of major provisions from the “One, Big, Beautiful Bill,” a Republican-led tax reform aimed at reshaping the fiscal landscape. With these changes, taxpayers will experience new benefits such as deductions on tips, overtime, and car loan interest.

Despite these benefits, there are significant concerns about how the IRS will manage this season, given the agency’s workforce has been reduced from over 102,000 employees during the Biden administration to about 75,702.

This downsizing, attributed to an initiative led by “Elon Musk’s Department of Government Efficiency,” raises questions about the IRS’s capacity to process returns and administer new forms efficiently.

Early birds can begin filing their taxes on Jan. 26 this year https://t.co/D5ELXlyajx

— New York Daily News (@NYDailyNews) January 8, 2026

Implications of Workforce Reduction

The National Taxpayer Advocate, Erin M. Collins, has expressed worries over the potential for a “rocky” tax season due to the workforce reduction and the complexity of new tax laws.

With fewer staff members, the IRS may face challenges in ensuring the timely processing of returns and providing adequate customer support. Historically, such cutbacks have led to delayed refunds and increased waiting times for taxpayer assistance.

IRS Acting Commissioner Scott Bessent has reassured the public of the agency’s readiness, citing updated systems designed to handle the new tax laws efficiently. However, taxpayers and tax professionals remain skeptical, recalling past instances where significant legislation led to processing delays and system issues.

New Forms and Filing Complexities

This tax season will see the introduction of new forms, such as Schedule 1-A for claiming exclusions and deductions, and Form 1099-DA for digital asset reporting. These changes aim to simplify reporting for taxpayers, yet also add layers of complexity that may slow down the filing process.

Tax practitioners are particularly concerned about the availability of these forms at the start of the season, given the IRS’s history of delayed form rollouts following major legislative updates.

As the IRS navigates these challenges, taxpayers are encouraged to file early and utilize online resources and free filing options to minimize potential delays. The IRS’s “Get Ready” campaign advises taxpayers to prepare their documents and understand new tax provisions ahead of the January 26 opening.