IRS Staff Cuts and Tax Law Changes Risk 2026 Refund Delays

The IRS faces significant operational challenges during the 2026 tax filing season due to a 27% workforce reduction since 2025, leadership instability, and complex retroactive changes from the “One Big Beautiful Bill” enacted in July 2025. These factors may delay refunds, affecting household cash flow and fiscal policy transmission. The agency has 1,000 fewer customer service staff than planned, and training was disrupted by a six-week government shutdown. Experts urge taxpayers to file electronically and use direct deposit to avoid weeks-long delays. New provisions like the “no tax on tips” rule and U.S.-assembled car loan interest deductions apply only to narrow groups—fewer than 3% qualify for the tip exemption. The IRS recommends using online tools like “Where’s My Refund” and the Interactive Tax Assistant before calling, and opting for callback services to reduce hold times.