In an environment where tax processing is important in a timely manner, small business owners can find hope and challenges in the update of Erin M. Collins, a national taxpayer advocate. On June 25, 2025, Collins issued a 2026 fiscal year -round target report to Congress, which reveals both success and continuous obstacles that can affect the upcoming submission season.
Collins said, “The 2025 submission season has been one of the most successful submissions in recent memories. Small companies that depend on tax refunds should be careful about the effects described in detail in the report.
This data suggests that the application season is relatively efficient, and the IRS has received about 141 million personal income tax declarations and handled about 138 million people. More than 95% of them were electronically submitted and about 62% were refunded. However, this report emphasizes the delay in refunding problems in the problem that affects certain groups, including victims of identity theft.
At the end of the submission season, about 387,000 victims of the theft were not resolved by the average solution of almost 20 months. Collins said, “This delay has an unbalanced impact on the vulnerable population that depends on refunds. Small business owners should know that changes in the ability of IRS to solve this problem can be ruptured and affected by the tax environment.
Collins also emphasized a significant risk of operating as the IRS moved to the 2026 submission season. IRS labor has been reduced by 26%, raising concerns while the agency’s ability to cope with the incoming influx, especially tax law changes. Without a strong employee model, taxpayer services and processing efficiency can be improved. For small businesses, this can be longer for processing and refunds, which are important factors for people with tight cash flows.
On the technology front, Collins emphasized the urgent need for modernization. IRS has established various “vertical” for technology projects to improve taxpayer experience. As with the experience of banking services, small companies can benefit greatly to the same improvement, such as a completely functional online account that can fully manage all tax -related transactions. However, the current function of the IRS online account is still limited, and it is difficult for small business owners who are familiar with the convenience of digital banking.
This report is recommended to prioritize three major IT projects.
- Improved online account functions,
- Automation of digitalization processes for paper return and letters
- Integrate heterogeneous case management systems to improve customer service efficiency.
Collins urges the IRS to adopt the «digital first» approach that is essential for the IRS to maintain the taxpayer service standard. As small business owners managed more and more operations online, similar functions of tax authorities are reasonable.
Despite the potential advantage of the 2025 technology upgrade and the successful application season, small businesses should be maintained carefully. The report said that the IRS has stopped more than 13 million revenue for further review, resulting in harmful refund delays. This situation may worsen if employee cuts and technical interference are not urgently resolved.
Collins has suggested some recommendations to strengthen the IRS’s ability to handle complex tax situations. Because of these changes, IRS often hopes to provide timely support and solutions to small companies that explore the cumbersome tax environment.
Collins’ vision for the IRS is clear, and her recommendation is an important issue for small business owners. The background of the successful application season brings optimism, but the tasks raised require advocacy and efficient technology implementation of prevention workshop, taxpayer rights. As IRS processing time and development are still uncertain, small business owners should maintain and prepare information.
For in -depth understanding, read the original report here.
Image through IRS
