The 2026 Filing Season Opens: The First Full Cycle Under OBBBA — and a Leaner IRS Behind It

Key takeaways

• The IRS opened the 2026 filing season on January 26, 2026, with a filing deadline of April 15, 2026 for most taxpayers (IR-2026-12).
• The agency expects about 164 million individual returns for tax year 2025 and is processing them with a workforce reduced by roughly a quarter over the prior year.
• This is the first season to reflect OBBBA — including the restored §174A domestic research deduction and 100% bonus depreciation — on filed returns.
• A leaner IRS does not mean lighter scrutiny on complex returns. It means slower cycles, more automation, and a higher premium on documentation that is complete the first time.

What opened, and when

The 2026 filing season began on January 26, 2026. The IRS set the standard deadline at April 15, 2026, and projected approximately 164 million individual returns for tax year 2025. The agency noted the date coincided with the 40th anniversary of electronic filing and, as it has for four decades, urged taxpayers to file electronically rather than on paper.

For most individuals, none of that is new. What is new is the law those returns now reflect, and the condition of the agency receiving them.

The first OBBBA-shaped returns

The One Big Beautiful Bill Act was signed July 4, 2025. Tax year 2025 returns are the first to carry its early-effective provisions, and tax year 2026 — the year now underway — is the first full year under the statute. Two changes reach business filers immediately.

Domestic research and experimental expenditures are deductible again in the year incurred under the new IRC § 174A, effective for tax years beginning after December 31, 2024. That reverses the capitalization-and-amortization regime that had governed since 2022. And 100% bonus depreciation has been restored under IRC § 168(k) for qualifying property acquired and placed in service after January 19, 2025. Both are addressed in more detail in our separate analyses; the point here is that the 2026 season is where they first land on a return.

For owner-led businesses, that means 2025 returns are not a routine continuation of 2024. The deductions available, the elections in play, and the catch-up opportunities for prior years are different. Filing on autopilot is the wrong posture this season.

The condition of the agency receiving the return

The more consequential change for many filers is not statutory. It is operational.

The IRS workforce contracted sharply over the past year through voluntary separations and reductions. The Government Accountability Office, in a report released March 16, 2026 (GAO-26-108116), found that staffing losses posed severe risks to IRS operations — noting that more than 17,000 employees had departed in 2025, that return processing and customer service functions entered the season understaffed, and that the agency did not meet its 13-day paper-return processing goal. The agency's senior executive ranks thinned considerably, and staff were reassigned internally to cover front-line shortages during the season.

We do not read this as a reason for complacency. Reduced examiner headcount changes the *tempo* of enforcement, not its *targets*. The high-income and large-partnership focus that took shape over the prior several years has been publicly reaffirmed, and the agency is leaning harder on data analytics to direct the capacity it retains. The practical effect for a complex return is a longer, more automated, and less forgiving process — one in which an incomplete or internally inconsistent filing is more likely to generate a notice and less likely to be resolved quickly by a person.

What this means for owners and finance leaders

The combination — new law, leaner agency — argues for two disciplines this season.

First, file a return that is right the first time. Refund timing, notice resolution, and examination cycles all lengthen when the agency is short-staffed. The cost of a correction is higher in 2026 than it was when the IRS could turn one around quickly.

Second, treat the OBBBA provisions as planning items, not just compliance line items. The §174A catch-up for prior-year research costs and the restored bonus depreciation carry elections and deadlines that reward analysis done now. A return filed without that analysis may leave deductions on the table that are difficult to recover later.

Bottom line

The 2026 filing season is the first to render OBBBA on actual returns, processed by an agency operating with materially less capacity. For straightforward filers, the season is ordinary. For owners with research costs, capital expenditures, or any return that depends on documentation surviving review, this is a season to be deliberate — because the system absorbing the return is slower and less forgiving than it was a year ago.