What Happens to Your Tax Refund If the IRS Faces Staffing Cuts During Peak Filing Season?

Why This Tax Season Is Getting Extra Attention

As the 2026 tax filing season ramps up, Americans are beginning to see an emerging pattern: refund timing may be slower than usual this year. The Internal Revenue Service (IRS) has warned that staffing reductions, complex new tax law changes, and elevated backlogs could stretch processing times for tax returns and refunds as millions of Americans file their 2025 returns ahead of the April deadline.

Part of the reason is that the agency has operated with significantly fewer employees compared with past years. In its most recent report to Congress, the National Taxpayer Advocate noted that the IRS workforce has dropped around 27%, making the 2026 filing season “one of the most challenging” in recent memory.

How IRS Staffing Cuts Could Slow Refund Processing

The IRS cuts have occurred over multiple years and across various functions, including core processing, taxpayer services, and correspondence work. With fewer experienced employees available to review returns, answer questions, and troubleshoot issues, several consequences are likely:

Slower processing for paper returns and complex cases
Tax returns filed on paper — which already take longer to process than electronic returns — could see even greater delays. Backlogs from previous years, which remain elevated, may compound delays.

Longer waits for identity verification and error checks
Returns that trigger identity protection filters or require a tax return adjustment may take extra time to resolve. With fewer staff trained in these areas, resolutions can drag on, delaying refunds for the affected taxpayers.

Increased backlog of unresolved cases
An annual IRS watchdog report noted that unresolved returns and correspondence were already at high levels going into the 2026 filing season, and staffing reductions have likely limited the agency’s ability to address that inventory quickly.

What Taxpayers May Experience

With these staffing constraints in place during peak filing season, here’s what many taxpayers might see regarding their refunds:

1. Longer wait times overall
Even for electronically filed returns, issuing refunds may take longer than the typical 21 days. Some analysts warn that refunds could extend into March or later for many taxpayers.

2. Paper filers face the longest delays
Because paper returns require manual handling, they have historically taken weeks, and sometimes months, longer than e-filed returns. In a lean staffing environment, this gap could widen further.

3. Customer service may be harder to reach
Reduced staffing levels can also affect phone and in-person support, meaning long hold times or delays in responses to correspondence or inquiries about refund status.

4. Direct deposit remains fastest
Tax experts continue to emphasize e-filing with direct deposit as the most reliable way to receive a refund quickly, since automated processing demands less manual intervention.

What IRS Watchdogs Are Saying

Oversight reports from the Treasury Inspector General for Tax Administration and the National Taxpayer Advocate highlight that workforce reductions, combined with complex new tax laws enacted last year, have created what some describe as a “perfect storm” for refund delays.

Those reports stress that while most taxpayers should receive refunds in a reasonable timeframe, especially if they meet all filing requirements and use e-file with direct deposit, challenges arise when returns need deeper review or when returns are flagged for issues.

One watchdog noted that while the agency expects to handle the filing season without major disruptions, “assistance for taxpayers who encounter problems remains uncertain” due to staffing limitations.

How to Prepare for Possible Delays

If you are counting on a refund this year, especially for major expenses like rent, bills, or planned purchases, consider these practical steps:

File early and accurately
Errors or missing information are one of the biggest drivers of delays. Filing accurately the first time reduces the need for correspondence or reprocessing.

Use electronic filing and direct deposit
The fastest refund turnaround generally comes from e-filing with direct deposit instead of waiting for a mailed check.

Track your refund online
Tools like the IRS “Where’s My Refund?” tracker can give real-time updates on your status without waiting on a phone queue.

Plan for patience
With reduced staff and higher case inventories, even smooth returns could take days or weeks longer than in past years.

What This Means for Your Wallet

A delayed refund doesn’t change the amount you are owed, but it does affect the timing of when that money hits your bank account. For many households that budget around refund timing, even a few weeks’ delay can force adjustments in spending or bill payments.

As the tax season continues, keeping an eye on IRS updates and tracking your own return status will help you stay informed and avoid surprises.

Sources

• “IRS faces stiff challenges in 2026 tax season,” Associated Press (IRS staffing cuts and workforce reduction context)
• “IRS Tax refunds delayed in 2026: Are 164 Million filings, staffing cuts and backlogs slowing your expected refund processing time?” Economic Times (data on staffing and refund delays)
• IRS National Taxpayer Advocate Annual Report to Congress (analysis of workforce and processing inventory)
• “IRS warns many tax refunds could be delayed,” TradingView (refund timing concerns)