In a landscape where timely tax processing is crucial for financial planning, owners of small companies can find hope – and challenges – in the recent updates of the National TaxPayer Advocate, Erin M. Collins. On 25 June 2025, Collins released the objectives of the tax year 2026 to the congress, which relieves both successes and continuous obstacles that can influence the upcoming archiving season.
“The 2025 archive season was one of the most successful archiving seasons in recent memory,” Collins noted, although with an atmosphere of caution with regard to the future. Small companies, many of which depend on timely tax returns, must pay close attention to the implications described in the report.
The data suggests that the recent archiving season has been relatively efficient, with the IRS received nearly 141 million individual income tax returns and processing approximately 138 million thereof. More than 95% of this was submitted electronically and around 62% resulted in restitutions. However, the report emphasizes that the disturbing repayment delays influence specific groups, including victims of identity theft – a problem that has disproportionate influence on those who depend on refunds for essential costs of living.
From the end of the archiving season, around 387,000 identity theft remained unsolved victim aid matters, with an average resolution of almost 20 months. “These delays have disproportionately influence on vulnerable populations that depend on their reimbursement,” Collins emphasized. Owners of small companies must be aware that changes or delays in the capacity of the IRS to tackle these problems through the tax landscape can wrinkle, which can influence their activities.
Collins also underlined considerable operational risks as the IRS goes to the archiving season 2026. The IRS personnel file has shrunk by around 26%, which expresses concern about the agency’s ability to tackle the coming inflow of declarations, especially in the midst of the expected changes in tax legislation. Without a robust personnel model, the intended improvements in taxpayers and processing efficiency can decrease. For small companies, this can mean longer waiting times for processing and repayments, a crucial factor for people with tight cash flows.
In the field of technology, Collins emphasized an urgent need for modernization. The IRS has set up various “verticals” for technology projects that are aimed at improving the experience of the taxpayer. Small companies would benefit enormously from improvements such as fully functional online accounts where they can seamlessly manage all tax -related transactions, just like their experiences with banking services. Nevertheless, the current functionality of IRS Online Accounts is limited and is a challenge for owners of small companies that are used to the ease of digital banking.
The report recommends prioritizing three important IT projects:
- Improving online account functionality,
- Automating the digitization process for paper returns and correspondence, and
- Integration of unfortunate case management systems to improve customer service efficiency.
Collins is insisting on the IRS to use a “digital first” approach, essential for maintaining taxpayer standards. Because owners of small companies are increasingly managing their activities online, the fact that comparable possibilities of tax authorities are reasonable seems reasonable.
Despite the potential benefits of technological upgrades and a successful submission season in 2025, small companies must remain careful. The report showed that the IRS had suspended more than 13 million returns for extra evaluation, which led to harmful repayment delays. This situation can not be worsened if staffing and technological obstacles are not urgently tackled.
Collins has made various recommendations to strengthen IRS’s ability to handle complex tax situations. The hope is that, with these changes, the IRS will be better equipped to offer timely help and solution to small companies that navigate an often cumbersome tax landscape.
Collins’s vision for the IRS is clear and its recommendations bring critical problems for owners of small companies. Although the background of a successful submission season entails optimism, the challenges that are set, proactive workshops, more advocacy for taxpayers and efficient technological implementations to guarantee smooth activities. Because IRS processing times and pre -scissors remain uncertain, owners of small companies would do well to remain informed and prepared.
Read the original report for an in -depth concept here.
Image via IRS
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