IRS Fiscal Year 2026 Results: What Preparers and Small-Business Owners Should Know
The IRS reported FY 2026 results on refunds, online tools, direct deposit, fraud reporting and Trump Accounts. Here is what to share with clients.
On October 29, 2026, the IRS released its fiscal year 2026 results (IR-2026-129). The agency reports record tax collections of $5.6 trillion, an increase of nearly 5 percent from the prior year. This summary covers the parts of the release that matter most for tax preparers and self-employed clients, including owners who file Schedule C (Anexo C).
Refunds and the filing season
The IRS says the total dollar amount of refunds claimed rose 17 percent over last year, and the average refund was up 11 percent. About 90 percent of electronic filers received refunds in less than 21 days. The agency also reports that the total amount of refunds paid increased by over 20 percent from 2025 to 2026.
The release also reports that, based on individual returns filed through mid-July, the overall average federal income tax rate fell to 12.6 percent for Tax Year 2025. That is a decrease of 4 percent from 2025. These are IRS summary figures, so they describe the overall picture, not any single client's return.
Online tools your clients are using
Taxpayers relied more on IRS digital services during 2026. The figures reported in the release include:
- Individual Online Accounts: about 37.6 million users, a 34 percent increase, with 224 million logins. Payments made through IRS Online Accounts rose 57 percent to more than $133.6 billion.
- Tax Professional Accounts: users increased 57 percent to 513 thousand.
- Business Tax Accounts: payments surged nearly 250 percent to $726.6 million.
- Where's My Refund? status checks: nearly 469 million.
- IRS mobile app: launched during the year. Over 140,000 customers downloaded it in the first five days, and over two-thirds of them chose the personalized experience using authentication.
For clients who ask how to check a refund or make a payment, these are the tools the IRS is pointing to. The mobile app gives taxpayers a way to reach IRS tools and account services from a phone.
Direct deposit and electronic processing
The IRS reports that 12 percent more refunds were issued by direct deposit compared with last year. The agency links this to Executive Order 14247, which calls for eliminating paper checks to reduce administrative costs, speed up payments and defend against refund fraud.
The Zero Paper initiative converts paper returns into digital data. For employment tax returns, the IRS says more than 90 percent of Form 940 returns and more than 80 percent of Form 941 returns were processed electronically. If you prepare payroll filings, these numbers show how far electronic processing has come.
Fraud protection and reporting
The IRS says it protected approximately $38 billion in tax revenue from identity theft refund fraud in fiscal year 2026. It credits the Security Summit, a partnership among the IRS, state tax agencies, and private sector companies and associations, for helping detect fraudulent returns and share information about new scams.
Clients can now report suspected tax fraud, scams, tax evasion and other tax-related illegal activity confidentially. They can select the Report Fraud button on the IRS.gov homepage or visit IRS.gov/SubmitATip.
The IRS also points to two awareness efforts: National Tax Security Awareness Week and the Protect Your Clients, Protect Yourself campaign. Both are meant to help people, businesses and tax professionals recognize scams and protect personal and financial information. Sharing the reporting option with clients is an easy way to reinforce these messages.
Trump Accounts
The release says nearly 70 million Trump Accounts are open for children under 18, and 27 million have already received funds from families, friends, donors and the U.S. government. The government contributes $1,000 to each child born between January 1, 2025, and December 31, 2028. The IRS says it is promoting these accounts through communications with taxpayers and tax professionals.
The release does not explain how to open an account or who qualifies beyond the $1,000 contribution rule described above. Check IRS.gov for current guidance before advising a client.
What to tell clients
- Direct deposit is the IRS's stated direction for refunds, and more refunds were sent that way this filing season.
- The IRS online account, the Where's My Refund? tool and the mobile app are available for checking status and making payments.
- Anyone who sees a suspected scam or fraud can report it through the Report Fraud button on IRS.gov or at IRS.gov/SubmitATip.
- Parents and guardians of children born in the eligible window may want to look into Trump Accounts on IRS.gov.
These are fiscal year figures reported by the IRS. They describe agency performance and do not predict how any individual return will be processed.
Informational only, based on the IRS source linked above; not tax or legal advice for a specific situation.