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Tax Season Is Year-Round

Recent IRS rule changes, form corrections, credits, scams, and filing‑season help that affect how people file and get refunds, but not specifically about back‑tax collections.

Recent IRS rule changes, form corrections, credits, scams, and filing‑season help that affect how people file and get refunds, but not specifically about back‑tax collections.

General IRS Filing Changes & Refund Issues

As the 2026 tax filing season advances, taxpayers continue to navigate a landscape marked by significant IRS modernization strides, important federal tax law changes, ongoing refund delays, and a sharp rise in sophisticated scams. Recent data reveal both encouraging progress and persistent challenges, underscoring the complex reality facing millions of filers striving to secure timely refunds while safeguarding sensitive information.

IRS Modernization and Refund Timing: Encouraging Gains Amid Targeted Holds

The IRS’s modernization efforts have yielded tangible improvements in refund processing transparency and taxpayer tools, though delays remain pronounced for certain returns. Newly released IRS data indicate a 14% increase in early electronic filings and average refunds, demonstrating growing taxpayer confidence in digital processes and outreach campaigns.

  • Projected Deposit Dates Enhance “Where’s My Refund?” Utility
    The IRS has upgraded its signature refund tracking tool by providing projected deposit dates—a marked improvement over prior vague “processing” statuses—especially benefiting early filers claiming the Earned Income Tax Credit (EITC) and Additional Child Tax Credit (ACTC). This enhancement empowers taxpayers to better plan finances and reduces uncertainty during the wait.

  • Refund Holds Continue for Certain Refundable Credits and Joint Filers
    Despite these advances, the IRS maintains targeted holds and extended verification on returns claiming multiple refundable credits or involving joint filers subject to Treasury Offset Program (TOP) debt collections. These measures, designed to prevent fraud and protect payment integrity, unfortunately contribute to frustration among affected taxpayers.

  • Increased Average Refund Amounts Reflect Policy Changes and Economic Factors
    According to a recent IRS update, the average refund amount has risen to approximately $2,476—up 14% from last year—benefiting from adjustments such as the increased standard deduction and the new “No Tax on Tips” deduction (discussed below). This jump highlights both improved refund processing and the impact of recent tax policy shifts.

Federal Tax Law Changes and Form Updates Shape the 2026 Filing Experience

Several important IRS rule changes, form corrections, and new deductions are influencing how taxpayers prepare returns, potentially affecting refund amounts and timing:

  • Standard Deduction Increase and “No Tax on Tips” Deduction
    Inflation-driven adjustments raised the standard deduction by roughly $500 for single filers and nearly $1,000 for married couples filing jointly, benefiting millions by reducing taxable income. Additionally, a new and widely welcomed “No Tax on Tips” deduction excludes an average of $1,400 in tip income from taxable wages, offering targeted relief to millions of service industry workers traditionally burdened by underreported tip income and related tax liabilities.

  • Temporary SALT Deduction Cap Raised to $40,000
    The State and Local Tax (SALT) deduction cap has been temporarily increased from $10,000 to $40,000, with income-based phase-outs. This significant change especially assists taxpayers in high-tax states such as California, New Jersey, and Michigan, though individual impacts vary and taxpayers are urged to consult IRS guidance or professionals.

  • Clarified but Evolving Taxability of Forgiven Student Loans and 1099-C Implications
    The IRS confirmed that some forgiven student loan debt will be taxable in 2026, complicating tax planning for borrowers. Relatedly, the issuance of Form 1099-C (Cancellation of Debt) has generated confusion and concern. A recent detailed video briefing titled “The 1099-C Discharge Nobody’s Talking About” highlights the nuances and taxpayer challenges in handling these forms, urging careful record-keeping and consultation with tax experts.

  • Expanded Injured Spouse Protections (Form 8379) and Streamlined Adoption Tax Credit Filing
    Updates to Form 8379 enhance protections against refund offsets for joint filers with student loan or child support debts, though practical implementation inconsistencies persist. Meanwhile, simplified documentation requirements for the adoption tax credit are easing filing burdens and expediting refunds for adopting families.

  • Multimedia IRS Guidance for W-4 and W-9 Forms
    The IRS launched interactive tutorials and embedded videos to assist taxpayers with withholding adjustments and identity verification, aiming to reduce errors, penalties, and refund delays.

  • Social Security and Medicare Tax Guidance for Gig Workers
    Updates in Publication 17 and Schedule SE clarify tax calculations for freelancers and gig economy workers, addressing common errors that previously triggered audits and processing slowdowns.

  • Disaster Relief Tax Clarifications
    The IRS reaffirmed that qualified disaster relief payments do not generally increase taxable income, providing reassurance to taxpayers affected by federally declared disasters.

State-Level Operational Strains and Persistent Refund Delays

While federal-level transparency has improved, many state tax agencies continue to grapple with backlogs and operational challenges:

  • Michigan Leads Reports of Lengthy Refund Delays
    Michigan’s Department of Treasury publicly acknowledged refund delays exceeding 30 days, citing high filing volumes, staffing shortages, and ongoing system upgrades. Similar backlogs affect states including California, New York, New Jersey, and Illinois.

  • New State Refund Tracking Portals Offer Mixed Results
    New Jersey and other states have launched online portals to update taxpayers on refund status after 21 days; however, update frequency and accuracy vary widely. Paper return processing remains a bottleneck, frustrating many filers.

  • Disproportionate Impact on Low-Income and Vulnerable Taxpayers
    Refund delays disproportionately affect low-income families and those relying on refunds for essential expenses, underscoring the importance of free assistance programs and advocacy at all government levels.

Surge in Tax Scams Amplifies Risks: Local Alerts and National Warnings

The 2026 season has seen a sharp uptick in tax-related scams employing increasingly sophisticated methods:

  • Roseville Police Department Issues Community Alert on Refund Scams
    Local law enforcement in Roseville, California, warned residents about fraudulent texts and emails impersonating the IRS, designed to trick recipients into clicking malicious links or revealing personal information.

  • IRS Impersonation and Identity Theft Scams Escalate
    Fraudsters continue to demand payments—often via gift cards, cryptocurrency, or wire transfers—while threatening arrest or legal action without official mailed notices. Victims like Lauren Cross, who faced a fraudulent $94,000 tax debt due to ex-spouse identity theft, illustrate the severe personal toll.

  • “Ghost Preparers” Remain a Significant Threat
    Unauthorized tax preparers who file fraudulent or altered returns without taxpayer consent cause erroneous tax liabilities, delayed refunds, and increased audit risks.

  • IRS and FTC Remind Taxpayers to Watch for Red Flags
    Key scam warning signs include unsolicited payment demands without mailed notices, requests for gift cards or cryptocurrency, and threats of immediate legal action. The IRS emphasizes it never demands immediate payment or sensitive information via phone, email, or text without official mailed correspondence and encourages reporting scams through the IRS phishing page and the Federal Trade Commission.

Practical Filing Guidance and Taxpayer Resources

To minimize errors, delays, and exposure to scams, taxpayers are encouraged to leverage IRS tools and educational materials:

  • Debunking the $600 Side Hustle Income Myth
    The IRS clarifies that all income must be reported regardless of amount, dispelling the common misconception that income below $600 is exempt from reporting.

  • Common Causes of Return Rejections
    Mismatched Social Security numbers, incorrect filing status, and missing signatures remain leading rejection causes. Early review and correction are critical.

  • Filing Without Key Forms
    New IRS video tutorials guide taxpayers through filing when W-2 or 1099-R forms are missing, helping ensure timely processing despite incomplete documentation.

  • Localized Refund Timing and Tracking Tools
    Updated online resources provide detailed federal and state refund timelines, assisting taxpayers in financial planning.

  • IRS Online Accounts and Email Alerts
    Creating a personal IRS online account and subscribing to official email notifications enable real-time refund tracking and timely updates.

  • Free Support via Taxpayer Advocate Service (TAS) and Volunteer Income Tax Assistance (VITA)
    These programs offer vital assistance with complex filings, tax disputes, and refund delays, particularly for low- and moderate-income taxpayers.

Actionable Tips for a Smooth and Successful Filing Season

To optimize tax outcomes amid evolving rules and persistent challenges, taxpayers should:

  • File Early and Stay Current on IRS Updates
    Pay particular attention to changes affecting refundable credits, Schedule SE, Form 8379, the SALT deduction cap, and the new “No Tax on Tips” deduction.

  • Verify All Personal and Dependent Information
    Double-check Social Security numbers, names, and signatures to prevent common processing errors.

  • Use IRS Tools and Stay Vigilant Against Scams
    Track refunds through IRS online accounts, confirm all IRS communications through official channels, and report suspicious contacts promptly.

  • Maintain Complete Documentation
    Retain copies of all returns, IRS correspondence, payment confirmations, and disaster relief records for potential audits or inquiries.

  • Adjust Withholding and Estimated Tax Payments Prudently
    Utilize updated W-4 guidance and withholding calculators to avoid underpayment penalties or unexpected tax bills.

  • Review EITC Eligibility Carefully
    Understanding the rules and income limits can reduce refund delays and prevent holds.

Conclusion: Balancing Progress with Persistent Challenges

The 2026 tax filing season reflects measurable IRS modernization progress, expanded tax benefits, and improved transparency—evidenced by a 14% increase in early filings and higher average refunds. Yet, persistent refund delays for returns with refundable credits or offset debts, coupled with escalating scam threats, demand continued taxpayer vigilance and proactive engagement.

By staying informed about evolving IRS rules, utilizing free assistance programs, carefully reviewing returns, and maintaining scam awareness, taxpayers can better navigate the complexities of this dynamic filing season, protect their refunds, and maximize available tax benefits.

Essential Resources

Staying informed, cautious, and proactive is essential for taxpayers to successfully navigate the evolving opportunities and risks of the 2026 tax filing season.

Sources (63)
Updated Feb 26, 2026