What the 2025 Taxpayer Advocate Service report signals

The National Taxpayer Advocate’s 2025 Annual Report to Congress offers a clear look at how IRS operations affect taxpayers and what tax professionals should expect going forward. The report highlights where the IRS made progress, where challenges remain, and how systemic issues continue to impact compliance, refunds and resolution timelines. 

A snapshot of taxpayer service

Overall, taxpayer interactions with the IRS were relatively stable in 2025. The agency processed more than 165 million individual income tax returns. About 94% were filed electronically, with roughly 11 million filed on paper. Around 104 million taxpayers received refunds, averaging about $3,167. However, almost 3.6 million taxpayers experienced some type of processing delay in 2025.

The Taxpayer Advocate Service (TAS) assisted millions of taxpayers over the past year, helping individuals and businesses resolve IRS problems they could not settle through traditional channels. This volume underscores how frequently taxpayers encounter obstacles that require intervention beyond standard IRS processes.

2025’s top ten most serious problems facing taxpayers

Each year, the report identifies the most serious problems encountered by taxpayers. The 2025 report emphasizes ongoing concerns with:

1. Amended returns: ongoing delays in issuing refunds and taxpayer confusion when claims are denied
2. IRS modernization and digitalization: continued reliance on paper workflows that slow processing and create inefficiencies
3. Telephones: service quality remains difficult to measure and many taxpayers still struggle to reach the right help
4. Independent Office of Appeals: concerns persist about impartiality, delays and maintaining public trust in the appeals process
5. Tax Pro Account: key tools for practitioner representation remain limited or unavailable in online accounts
6. Records access: slow responses and incomplete handling of administrative record requests
7. Centralized authorization file: persistent authorization breakdowns that interfere with representation and due process rights
8. Social media: widespread tax misinformation and scams that mislead taxpayers and increase fraud risk
9. Taxpayers living abroad: significant compliance burdens and barriers for taxpayers outside the United States
10. International withholding relief: lengthy delays in relief processes intended to address cross-border withholding issues

Identity theft and amended returns remain pain points

Identity theft cases remain one of the most challenging issues highlighted in the report. Taxpayers affected by identity theft often face extended delays that can stretch well beyond a year before refunds are issued, or accounts are corrected. 

Amended returns also continue to face extended IRS processing delays. The report notes that while the IRS has made progress in reducing backlogs, amended returns still take far longer than taxpayers expect. 

Staffing and operational challenges

The report raises concerns about IRS staffing levels and operational capacity. While previous years saw improvements associated with increased funding and hiring, TAS observes that subsequent reductions in staffing along with increased tax return complexity could reverse some of those prior-year gains. Fewer employees handling correspondence and casework may directly affect response times and case resolution. Even well-prepared cases can stall when resources are limited.

Taxpayer rights and advocacy

A central theme of the report is protecting taxpayer rights. The TAS report emphasizes that access to timely service, clear communication and fair treatment are foundational to voluntary compliance. When taxpayers cannot get answers or resolve issues, trust in the system erodes.

Takeaways for tax professionals

The 2025 report reinforces a practical reality for tax professionals: most returns move through the system smoothly but delays often begin when something triggers additional review. Electronic filing and direct deposit remain the best way to reduce refund timing issues, yet identity theft cases and amended returns can still take months to resolve. For taxpayers caught in these longer timelines, the Taxpayer Advocate Service continues to serve as an important backstop, helping address unresolved IRS problems and prevent avoidable financial strain.