Short staffing and the transition from paper checks to digital refunds are among the biggest challenges facing the Internal Revenue Service (IRS) this tax season.
That’s according to the National Taxpayer Advocate’s expansive Annual Report to Congress, the latest version of which was recently posted online. The annual report aims to “help Congress strengthen taxpayer rights, reduce taxpayer burden, and improve IRS performance.”
The Taxpayer Advocate Service, or TAS, is an independent office within the IRS that’s meant to look after the interests of taxpayers. Erin M. Collins, who submitted and signed off on the latest report, has served as the National Taxpayer Advocate since 2020. Here are some highlights of the report:
Transition away from paper checks could impact refunds for some
Specifically, the report notes that while the majority of refunds were issued electronically last year, “taxpayers who do not provide direct deposit information may experience significant refund delays, as the IRS will generally hold refunds for up to six weeks while requesting banking information or determining whether an exception applies, with paper checks only issued afterward.”
As a result, some taxpayers will be disproportionately affected by the agency’s phasing out of paper checks.
That includes taxpayers without bank accounts, or who are disabled, elderly, or underbanked, and “other vulnerable taxpayers for whom paper checks have often been the only practical means of receiving refunds needed to cover basic living expenses.”
Average refunds last year tallied $3,167, the report says—a significant amount for many households.
Filing your tax return online should result in a refund being issued within a few weeks—but, again, the report is warning that may not be the case for some.
Only 6% of taxpayers filed their returns last year on paper. And only 7% received their refund via paper check.
The IRS is significantly smaller this year
Staffing issues at the IRS could be an even bigger issue. The IRS last year had a relatively large workforce, due in part to an influx of funding from the Biden-era Inflation Reduction Act.
Over the past year, however, the IRS has had its workforce reduced by 27%, according to Collins’s report.
That’s in addition to “leadership turnover, and the implementation of extensive and complex tax law changes mandated by the [One Big Beautiful Bill Act of 2025], many of which apply retroactively and require significant IRS programming, guidance, changes to tax forms and instructions, and taxpayer education.”
The number of customer service agents was also cut by 22%, meaning it will likely be more difficult to get help if you’re trying to work out any issues with or get an update on your refund.
In all, the agency’s manpower stood at around 74,000 in December, down from 102,000 a year ago. That could mean a more turbulent experience for taxpayers trying to keep track of their refunds.
Even so, taxpayers expecting a refund can use the Where’s My Refund online tool to check their status 24 hours after filing electronically.
They can also try using the IRS2Go app or log in to their IRS Individual Online Account for updates.