Identity theft is becoming one of the biggest time drains for tax professionals this filing season, and the IRS may be less equipped than ever to handle it.
According to the IRS Advisory Council—the body representing tax professionals—identity-theft refund cases now take nearly two years to resolve, as staffing cuts and system limits slow IRS response.
But identity theft is only one of a long list of problems that can only get worse this year. Tax professionals are bracing for prolonged client disputes and frustrating follow-ups with an understaffed, ill-equipped IRS.
CPA firms heading into the 2026 tax season expect revenue gains driven primarily by higher prices, not by adding clients, even as a majority anticipate another heavy extension season.
According to the CPA Trendlines Busy Season Barometer, about 6 in 10 firms expect total revenue to increase this year, while roughly one-third expect revenue to hold steady. Profit expectations trail revenue slightly, a pattern that points to continued cost pressure even as clients and would-be clients clamor for more, and more high-end, services
With only a week to go before the opening of filing season 2026, tax practitioners are focusing on IRS dysfunction as their biggest potential problem this year
And no wonder. The agency was already chronically underfunded, buried under a mountain of overdue paperwork, and crippled by ancient computer systems when it lost 25% of its workforce in early 2025.
Today 63% of tax professionals say a beleaguered IRS poses the single biggest risk to this year’s tax season, up from 54% just a couple of months ago, according to the CPA Trendlines Busy Season Barometer.
Heading into 2026, problems from the past several filing seasons are still unresolved.
By CPA Trendlines Research
The coming 2026 filing season is shaping up to be another high-stakes test of the Internal Revenue Service’s capacity to serve taxpayers and practitioners, with new reports from the Treasury Inspector General for Tax Administration offering an unusually candid look at the agency’s most vulnerable operational seams.
Taken together, the findings forecast a filing season characterized by incremental improvements in training but overshadowed by enduring structural constraints in telephone service, submission processing, identity verification, and staffing.
Less capacity, more obligation.
