IRS Refund Delay - IRS Backlogs Aren’t Abstract: What “Inventory” Really Means—and How to Keep Your Refund From Getting Stuck

A wise tax executive once said . . .

It's one thing when we here at EXFEDTax warned everyone about the disaster in the making with filing season '26, but when TIGTA (the Treasury Inspector General for Tax Administration) confirms the warning that the IRS is entering a filing season with elevated “inventories,” it can sound like bureaucratic jargon. Inventory of what, exactly? And why should the average taxpayer care?

Because “inventory” is not a metaphor. It’s not a spreadsheet. And it’s not just a number on a dashboard.

Inventory is work sitting somewhere in the system that still needs human hands, human eyes, and human decisions. And when those piles grow—especially in a year when staffing is constrained and modernization is not fully deployed—refunds are more likely to slow down, not because the IRS wants them to, but because the machine becomes physically harder to move.

What TIGTA means by “inventory,” and IRS Refund Delay - in plain terms

TIGTA’s 2026 filing season readiness memo describes a set of categories that collectively represent “work waiting to be worked.” These are areas where returns or taxpayer actions require processing beyond a simple electronic acceptance.

Examples include paper-filed returns, amended returns, taxpayer correspondence, error resolution cases, rejects, and “unpostables” (items that can’t be posted to an IRS taxpayer account because something doesn’t match or doesn’t compute).

TIGTA reports that, as of December 2025, these inventories in key categories were materially higher than pre-pandemic levels, and that staffing reductions and the October 2025 funding lapse contributed to the IRS carrying more work into the 2026 filing season than it otherwise would.

That’s the formal framing. Here’s the operational translation: when inventories are high, anything that pushes your return into “manual handling” territory is more likely to take longer.

The part nobody pictures: this is not suit-wearing work. Here’s the uncomfortable truth: a lot of IRS backlog work is not policy. It’s not glamorous. It is not people in suits making high-level decisions. It’s long, tedious, repetitive work done by human beings in processing environments that look more like logistics operations than financial institutions. It is paper moving through a constrained system.

I’ve lived this firsthand. When I was the Estate & Gift Policy Director, “inventory” wasn’t an abstract metric. We were clearing backlogs that arrived in tractor trailers—literal trailer loads of paper. Two shifts. Around the clock. We weren’t debating theory; we were moving volume so taxpayers could get answers and the system could breathe again. Without the hands to move the paper, there will always be an IRS refund delay.

It wasn’t pretty. It wasn’t fast. And it wasn’t “that’s above my pay grade.” I’ll never forget one peer—standing there in TAN pants—looking at the operation and saying, “Not our job.”

But when inventories explode, it becomes everybody’s job, whether it’s in your position description or not. That’s the part the public doesn’t see: reassignment, shortened training, triage decisions, and a constant struggle to keep the pipeline flowing.

TIGTA’s memo is essentially the watchdog version of that reality: the IRS is entering filing season with bigger piles and fewer fully trained hands in some of the most important functions that touch returns and refunds.

Why inventories matter for refunds

Most refunds are issued quickly when a return is clean: e-filed, accurately matched to IRS information documents, and not flagged for identity or integrity verification.

Delays tend to happen when a return needs a human.

That “human” might be needed because a return is paper-filed and must be manually transcribed or routed. It might be needed because the IRS needs to resolve an error condition, verify identity, reconcile a mismatch in reported income, or handle correspondence.

TIGTA highlights that these very categories are elevated and that staffing in key filing season functions has declined—conditions that, taken together, increase the risk that manual work takes longer to clear.

Modernization helps, but TIGTA notes that some modernization initiatives may not deliver meaningful relief in time for the 2026 filing season. For example, TIGTA reports that only a small portion of paper returns had been digitized under the Zero Paper Initiative as of early December 2025.

Again, translation: if your return is paper, or if it gets kicked into an error queue, you’re more exposed to the backlog.

How to reduce the chance your refund gets delayed

The goal is simple: keep your return out of the “needs a human” pile.

1. E-file whenever possiblePaper filing increases exposure to manual handling and processing delays. If you must paper-file, follow best practices: keep a full copy, mail it using a trackable method, and retain proof of mailing.

2. Use direct deposit and confirm the numbersRefunds issued by direct deposit are typically faster and less prone to delivery issues than paper checks. A wrong routing or account number can create avoidable delays.

3. Match what the IRS already hasYour W-2s and 1099s are reported to the IRS. If what you report doesn’t reconcile with what the IRS sees, your return may be routed for verification or error resolution. That’s exactly the kind of inventory TIGTA describes as elevated.

4. Make identity details boringly perfectNames, Social Security numbers, dependent information, and filing status should match official records. Name changes due to marriage are a common “simple” issue that can cause real delays when a system mismatch triggers review.

5. Don’t guess on withholding or creditsMath errors and unsupported entries can push a return into error resolution. If you’re claiming credits, make sure you’re eligible and documentable. A clean refund is a fast refund.

6. Respond fast to IRS lettersIn a season with elevated correspondence inventories, time matters. If the IRS asks for something, respond quickly and completely to avoid getting stuck behind other “pending” work.

7. File early—but only when you’re readyFiling early can help avoid peak-season volume, but filing before you have all your income documents can backfire if it creates mismatches that trigger verification.

What ExFed Tax does differently

At ExFed Tax, we don’t just file and hope the system behaves. We file with the reality of the system in mind.

That means we focus on the factors that predict whether a return will sail through automated processing or get diverted into manual queues. We treat accuracy, reconciliation, and documentation as refund-speed tools—not just compliance boxes.

Because the “tractor trailer” era of IRS inventory is not ancient history. It’s a recurring operational condition, and TIGTA’s memo is a reminder that it’s still a core constraint heading into the 2026 filing season.

If you want help reducing the risk of refund delays, reach out to EXFEDTax. We left the IRS. You’re welcome.