The IRS says it took in $5.6 trillion in FY 2026 (nearly 5% more than FY 2025). They also report larger refunds, lower average tax rates, and greater use of digital services. All of this is in IR-2026-129 if you're the sort of person who reads IRS press releases for amusement.
The IRS credits the Working Families Tax Cuts of 2025 with some of these outcomes. The GAO, by contrast, noted the less glamorous side of the equation: processing delays and customer service issues. Far from a total triumph.
The Law in Play
Public Law 119-21 (enacted July 4th 2025) introduced deductions for qualified tips, overtime pay, vehicle loan interest, and eligible seniors. It also increased the standard deduction and created Trump Accounts for children.
Several of the provisions apply to tax year 2025 returns filed in 2026. Eligible taxpayers will claim the new deductions on Schedule 1-A (Form 1040).
Executive Order 14247 (issued March 25, 2025) directed federal agencies to move from paper payments to electronic payments where legally permissible. The aim is to speed up processing and reduce fraud, with the caveat that taxpayers without access to electronic payment methods must be accommodated.
Timeline
March 25, 2025: President Trump signed EO 14247, directing agencies to move to electronic payments.
July 4th 2025: Congress passed Public Law 119-21, which introduced new deductions and Trump Accounts.
January 26, 2026: The IRS has opened the filing season for 2025 tax returns.
August 10, 2026: The GAO released its filing season review, including findings on refund delays and longer telephone wait times.
Oct 7: White House says nearly 70m Trump accounts have been created, over 60m of them via auto-enrollment.
October 29, 2026: IRS fiscal year performance announcement.
Present: The IRS has issued its performance summary. The FY 2026 Data Book is still not live on the agency's statistics page.
The Story
Individual Online Accounts? Up 34% to 37.6 million. Payments through those accounts totaled $133.6 billion. The IRS also says it has stopped $38 billion in identity theft refund fraud. Take that however you like.
Refunds went up as well. The average refund was up 11%. The average federal income tax rate for returns filed by mid-July was down to 12.6% (a 4% relative decline). That's a relative change, though, not a 4-point drop. And before you get all excited, those figures don't actually tell you how much any individual taxpayer has gained under the new law.
But service? Not so good. The GAO found paper returns took about a month to process (double the time in 2025). Average phone wait times had increased from three to eight minutes. Progress, clearly.
By May, the IRS had sent 4.2m notices asking for bank details before releasing refunds. Electronic processing is much faster, of course (if you're still on paper, you'll have to enjoy the extra paperwork).
What It Means in Practice
Review the 2025 deductions. Check your eligibility for qualified tips, overtime, senior, and vehicle loan interest deductions on Schedule 1-A. Consider amended returns where you may have omitted eligible deductions.
Verify the refund payment details. Confirm the direct deposit details. Taxpayers receiving Notice CP53E generally have 30 days to provide their bank details before further refund delays occur.
Monitor the paper filed returns. Allow longer processing times for amended returns, correspondence, and clients who can't use electronic services.
Review the Trump account eligibility. The IRS reported nearly 70m accounts created, with over 27m of those funded. Parents should review the activation requirements and Form 4547 guidance for eligible Treasury contributions.
Distinguish collection figures. The $5.6 trillion figure is reported collections (i.e., not the individual income tax liability, and not the government's net receipts after refunds). You have to compare equivalent measures to assess the year-on-year change.
The IRS still isn't finished with e-payments and Trump Accounts either. For the practitioners: watch for further rules on account activation, refunds, and next year's filing instructions. The FY 2026 IRS Data Book is still MIA.
One More Thing
So, higher collections and greater digital adoption on one hand. On the other hand, oversight bodies still largely agree that there are gaps for anyone outside the IRS's digital world.