IRS Issues Refunds On Time Despite Large Workforce Cuts

The Internal Revenue Service successfully processed the vast majority of tax returns and issued refunds on schedule during the 2026 filing season despite operating with a workforce reduced by roughly 28,000 employees, according to a new report from the agency’s independent watchdog. However, the report found that millions of taxpayers who required direct assistance faced significant difficulties obtaining help.

Erin Collins, the National Taxpayer Advocate, presented the findings in a midyear report to Congress released this week. She acknowledged that considerable uncertainty about the IRS’s ability to manage the season had been put to rest, stating the agency performed better than expected in most respects. The IRS processed nearly 139 million individual returns and issued over 90 million refunds, marking increases from the previous year.

This outcome was achieved amid sweeping organizational changes and a major tax law overhaul. The agency relied heavily on automation and a digital-first shift, with 98 percent of returns filed electronically. Collins credited IRS leadership and its workforce for overcoming extraordinary operational pressures.