Each year, the National Taxpayer Advocate reports to Congress on how the IRS is performing—and where taxpayers continue to face challenges. The most recent reports, released in January and June 2026, show that while the IRS is handling a high volume of returns efficiently, issues still arise when matters become more complex, and there is always room for improvement.

June 2026 Update: FY 2027 Objectives Report

The Fiscal Year 2027 Objectives Report to Congress (released June 24, 2026) highlighted a largely successful 2026 filing season. The IRS processed nearly 139 million returns, and most refunds were issued without issue.

However, the report also identified several ongoing concerns:

  • Refund delays for returns that are pulled for additional review

  • Slow processing of paper‑filed documents and checks

  • Extended resolution timelines for identity theft cases

  • Continued difficulty reaching the IRS for live assistance

These challenges typically affect taxpayers whose situations fall outside routine processing. Once a return is flagged or delayed, resolution often requires follow‑up and direct communication with the IRS.

The report also noted continued concerns surrounding penalties. Many taxpayers face penalties that may be avoidable or subject to abatement, but resolving these issues requires timely action and proper handling. In addition, the IRS is working on an automatic relief from certain penalties, expected to be announced soon, which may help some taxpayers but will not cover every situation.

January 2026 Overview: 2025 Annual Report to Congress

Earlier in the year, the National Taxpayer Advocate released the 2025 Annual Report to Congress (January 28, 2026), which outlined many of the same systemic issues.

Key highlights included:

  • Ongoing delays in resolving taxpayer cases

  • Backlogs affecting amended returns and correspondence

  • Communication challenges between taxpayers and the IRS

  • The need for improved support in more complex situations

This report reinforced a consistent theme: while the IRS has improved processing efficiency, service gaps remain when issues require additional review or intervention.

What This Means for You

For many taxpayers, filing a return is straightforward. But when a return is delayed, a notice is issued, or a discrepancy arises, the process can quickly become more complicated.

Common situations we are seeing include:

  • Refunds held for review or verification (including CP53E‑related issues)

  • Notices involving penalties or discrepancies

  • Delays tied to amended filings or identity verification

Addressing these issues correctly—and promptly—can prevent additional delays, penalties, or complications.

Since the end of tax season, we have been assisting clients with many of the issues highlighted in these reports, both with the IRS and with other tax authorities. Because we have access to the tax practitioner priority IRS phone line, once we have a signed Power of Attorney, we can often contact the IRS directly, help clarify the situation, and work to resolve issues efficiently while minimizing stress and uncertainty.