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2026 Tax Filing Season – New Processes Required?

In recent weeks, significant events have occurred that will need to be considered when preparing to file 2025 tax returns in 2026:

  • IRS workforce cut in half.
  • New CEO is 7th IRS leader of 2025.
  • The OBBBA is a major tax bill impacting business and individual taxpayers.
  • Individual and Business tax filings will require direct deposit information for tax refunds.

These changes will exert pressure on IRS to prepare for the filings season. Typically, IRS shuts down the e-file system in late December each year to re-program for the new tax year. When a large tax bill has been enacted, this process can take more time. There has already been debate by IRS leaders in recent weeks about whether the 2025 tax season could still begin in late January 2026, as has been the tradition for years.

In addition to timeline and workforce challenges with IRS, there are other important processes that may be very challenged for the 2026 filing season:

  • Federal tax laws, such as OBBBA include new tax provisions but many provisions require future releases of “guidance” by IRS, to clarify specifics of tax compliance.
  • States follow Federal tax law changes with their own respective state law changes. These state tax filing changes must also be programmed by state agencies and require time.
  • Tax software companies follow IRS and State tax law changes, and require additional time, especially with new or revised tax forms. Many tax forms may be delayed in release for final tax preparation, often into February and some into March of a tax filing season.

The above concerns about 2026 tax compliance come on top of other challenges in recent years:

  • Late and/or corrected tax reporting forms are more common in recent years, due to delays or corrections by payors and/or reporting entities, including W-2’s, Forms 1099-B (for investment income), Forms 1099-NEC/Miscellaneous, Schedules K-1 (for pass-through entities), and other tax reporting forms.
  • The e-file process requires additional time well in advance of due dates such as March 15th (for business entities), and April 15th (for individuals and business entities). E-files can be rejected due to various “matching” problems in Federal and State tax databases.
  • Tax extensions for the current tax year and estimated tax payments for the next tax year require advance information gathering, calculations, and communications to ensure proper amounts are paid prior to tax return due dates.
  • Dealing with IRS or State tax notices about proposed adjustments to tax returns filed, often require POA (or equivalent) filings by tax preparers to represent taxpayers. Resolving tax notices can be lengthy and problematic with IRS and State agencies having personnel and systems challenges.

All of the above concerns should be taken into account ahead of the 2026 tax filing season, with likely changes in timelines and data gathering affected. The days of “filing on time” may need to be reconsidered. Filing on time will require a lot of tax documents and other information to be available early and tax return preparation concluded well in advance of due dates.

Alternative strategies for annual tax compliance should include evaluation of the following factors:

  • Expected timing of receipt and turnaround of all tax reporting forms, and other supporting financial information so that tax preparation can be completed well in advance of tax due dates.
  • Projected tax results, especially for potential taxes due, so that current year taxes due and next year’s estimated tax payments can be clarified well before e-filling of current tax returns.
  • Potential delays in receiving final financial or tax reporting documents from third party payors or reporting entities.
  • Business or personal non-tax filing timelines for document gathering through e-filing, to minimize “last minute” tax filing and/or tax decision-making problems.

Tax professionals must abide by IRS rules and professional tax standards to practice and serve businesses and individuals. With an eye to the future, tax pros may be doing their best work to advise clients on the logistics of annual tax compliance ahead of their actual tax preparation in 2026. Our firm will be taking a proactive approach with clients next tax season – to protect the integrity and quality of professional tax preparation and tax planning for all parties.