IRS watchdog warns of the agency’s unpreparedness

Accountants and CFOs, brace yourselves for IRS gridlock this filing season.

Reduced staffing levels, new tax legislation, and a backlog of taxpayer correspondence could combine to make for a difficult tax season, the Treasury Inspector General for Tax Administration (TIGTA) warned in a January 26 memo. And it backed up that claim with plenty of quantitative evidence.

IRS staffing levels were down 19% in October 2025, TIGTA said. The number of “key filing season” staff, whose tasks include processing and fixing returns and answering taxpayer questions on the phone, was down by 17%.

The government shutdown that began October 1 (IRS employees returned to normal operations on November 13) and the agency’s new hiring policies, which state that the IRS CEO and the Department of the Treasury must approve job postings and individual hires, have also slowed down the hiring process.

In August 2025, Accounts Management (the team that handles inquiries, adjusts tax accounts, and resolves discrepancies) was approved to hire around 3,500 people for the 2026 filing season, but only 66% of them have been onboarded. Since new hires aren’t fully trained, they can only screen calls and answer basic questions, TIGTA said.

The IRS is also sitting on a backlog that’s 129% larger than it was before the pandemic. In December 2019, it had an inventory of 871,000 items on its to-do list, including taxpayer correspondence and amended tax returns. By December 2024, that inventory had swelled to 1.5 million items—and that was before the staff cuts. Now the agency is facing a backlog of 2 million items.

New tax legislation (stemming from the OBBBA) means “it’s going to be a more difficult filing season,” former IRS Commissioner Larry Gibbs told the Federal News Network. “It is really serious when the coverage goes down during a year when changes have been made in the tax law. It means that taxpayers have to wait 30 minutes to an hour and a half to get their calls answered by the IRS.”

Fingers crossed: Are accountants doomed to suffer this tax season? In 2025, things went surprisingly smoothly despite reductions in force and constant leadership upheaval. Still, accountants and tax staff might want to keep something wooden in their offices to knock on, just in case.