Tax pros weigh in on how the IRS tax filing season is going
For tax professionals and the filers they're helping
(CNN) — The IRS is operating with roughly 27% fewer employees this tax filing season than it did last year. And, last July, a major new tax law took effect, containing many new provisions affecting individuals for tax year 2025.
We checked in with some tax professionals to get a read on how the filing season has been going so far, both for them and for their clients.
Here are some top takeaways:
Confusion over new tax breaks
No tax on overtime. No tax on tips. No tax on Social Security.
That’s how three new tax breaks have been pitched to the public by politicians. The only problem? The “no tax” part is incorrect.
Take Social Security. “The new law did not change the taxability for Social Security,” Tom O’Saben, director of tax content for the National Association of Tax Professionals, said in a press call. What it did was offer anyone over 65 – regardless of whether they get Social Security benefits – an additional deduction of up to $6,000 ($12,000 for joint filers), subject to income limitations.
As for tips and overtime income, the new breaks are deductions that only reduce the tax owed on that income by a percentage. And the break only applies to “qualified” tips in certain industries and only a portion of one’s “qualified” overtime. Figuring out just how much is deductible isn’t simple.
Filers aren’t clear on how much of a break they’ll get. For instance, O’Saben noted one of his clients mistakenly thought the tax break he’d get on his overtime is a credit, meaning a dollar-for-dollar reduction of his tax bill equal to the amount of eligible overtime he earned. So for every $100 in eligible overtime, he assumed his tax bill would be cut by $100. But, in fact, the deduction for every $100 of eligible overtime would only reduce his tax bill by $100 multiplied by his top tax rate. If he’s in the 12% bracket, he’d cut his tax bill by just $12. If he’s in the 22% bracket, he’d see $22 in tax savings.
And, while the IRS has done a reasonable job of putting out information on the new tax breaks, according to O’Saben, the guidance is still subject to updates.
For example, just last week, the IRS issued updated rules for the tips deduction that contained a new qualifying element for self-employed filers who claim it, said Josh Youngblood, a Dallas-based enrolled agent. The change was more in line with what the relevant statute says, Youngblood noted, but it means the self-employed will get less of a tips tax break than originally thought.
Lack of clarity over documentation
Another area of uncertainty: just how much documentation a filer needs in order to verify what they’re claiming, especially since the IRS did not change the W2 form for 2025 and made it optional for employers to report an employee’s taxable tips and overtime on that form, which they will have to do next year.
“We don’t have a set structure in place that we will have in 2026,” O’Saben said.
Most refunds processed quickly
As of February 27, the IRS reported processing 36.5 million refunds so far. And the average refund paid out so far is $3,742 per return, an increase of 10.6% from the same time last year.
If a return is relatively straightforward, has no complicating factors or errors, and is filed electronically, “That refund is going to come within three weeks,” said Jan Lewis, vice chair of the American Institute of CPAs (AICPA).
But, O’Saben told CNN, “returns that include certain credits or that trigger additional verification appear to be taking longer, which (NATP) members suspect is related to increased fraud screening and verification procedures.”
Mixed results when calling the IRS
Tax practitioners contact the IRS during filing season not just with questions pertaining to current returns but also to deal with cases stemming from clients’ prior year returns.
On the bright side, Youngblood said that in his experience the IRS is processing power of attorney forms much faster than they were last year. And a revenue agent he has been working with on a client’s audit is very responsive and processing things faster than expected. But for collections cases, he said, it’s taking “an insane amount of time” to set up a hearing with the IRS.
More generally, tax professionals haven’t had the easiest time getting through to the right person in a timely way and getting the help they need on first try.
“Practitioners are still reporting difficulty reaching the IRS by phone, particularly on practitioner priority lines. Wait times can be lengthy, and in some cases members say they’re having to call multiple times to get through,” O’Saben noted.
In other instances, getting through to an IRS employee is less of an issue than getting an employee who can handle a tax pro’s request.
“It’s about their training and their understanding,” said Melanie Lauridsen, AICPA’s vice president of tax policy and advocacy.
Since many long-tenured employees have left the agency, “We’ve got a less experienced IRS staff and a smaller staff,” said Tina Collins, director at large for the National Association of Enrolled Agents. “So there’s a longer time to get things resolved.”
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