The National Taxpayer Advocate’s 2026 mid-year report to Congress, released June 24, 2026 (IR-2026-79), shows a tax season that mostly ran smoothly for straightforward returns but got noticeably worse for anyone who needed direct help from the IRS. Call answer rates fell, hold times climbed, and more than a million taxpayers hit refund delays beyond the normal processing window.
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What happened
The IRS processed 138.6 million individual returns during the 2026 filing season and issued 90.4 million refunds, with about 98% going out via direct deposit and an average refund of $3,275, according to the report. That headline number reads as a largely successful season.
The strain shows up in the details. The report found the IRS’s overall phone answer rate dropped from 25% in 2025 to 21% in 2026, while average hold times rose from roughly 8 minutes to 14. Specific service lines fared worse: the Installment Agreement line answered only 31% of its 3.4 million calls, with roughly 45-minute average waits, and the Identity Theft line answered just 19% of 2.4 million calls, with about 20-minute waits and case resolution delays of approximately 20 months. Over 14 million returns were suspended during processing for further review, and more than a million taxpayers experienced refund delays averaging 5.5 weeks beyond standard processing times, with paper check requests facing additional delays tied to the rollout of Executive Order 14247.
Why it matters
These numbers reflect a filing season that ran on a smaller IRS workforce than in prior years, following broad staffing reductions across the agency. The National Taxpayer Advocate’s own framing, per the report: “The vast majority of taxpayers filed successfully, but taxpayers requiring assistance often struggled to get it.”
For most straightforward, electronically filed returns, automation carried the load and refunds went out normally. The bottleneck is concentrated in exactly the cases that require a human: identity theft resolution, installment agreement setup, and any return flagged for manual review.
What this means for small business owners
If your business has a clean, simple return, this report probably won’t affect you. But if you’re dealing with anything that requires IRS phone support — setting up or modifying a payment plan, resolving an identity theft flag on a business account, or following up on a return that got pulled for review — budget for real delays. A 45-minute hold to reach the Installment Agreement line, or a 20-month wait on an identity theft case, is not a worst-case scenario right now; per this report, it’s closer to the norm.
This is also a strong argument for routing IRS correspondence and notices through your bookkeeper or tax preparer rather than trying to resolve them solo by phone. A practitioner with a dedicated practitioner priority line or established IRS relationship can often move faster than an individual taxpayer waiting in the general queue — and catching a suspended or flagged return early, before it sits in the 14-million-return review pile, matters more than ever this year.
“The vast majority of taxpayers filed successfully, but taxpayers requiring assistance often struggled to get it,” the National Taxpayer Advocate wrote in the mid-year report.
The bottom line
The 2026 filing season numbers look fine on the surface — refunds went out, most returns processed normally. But the IRS’s capacity to help anyone with a problem case has clearly thinned out, with call answer rates down and multi-week-to-multi-month delays on anything that needs manual attention. If you anticipate needing IRS assistance this year, plan for longer waits and lean on professional help early rather than after a notice turns into a deadline.
