In January, the National Taxpayer Advocate submitted the Taxpayer Advocate Service (TAS) Report to Congress for 2025, outlining concerns and recommendations related to top Internal Revenue Service (IRS) operations.
The TAS is an independent organization within the IRS charged with protecting taxpayers' rights. TAS fulfills its mission by assisting individual taxpayers in resolving IRS issues and by identifying systematic problems and opportunities to improve IRS services. As National Taxpayer Advocate, Erin Collins submits an annual report to Congress outlining these findings and recommendations.
While the IRS focuses on encouraging compliance and discouraging tax crime, TAS reviews how effectively the agency serves taxpayers and identifies areas for improvement. The report includes both data and recommendations. Highlights from the most recent Annual Report to Congress include:
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More than 165 million individual tax returns were processed by the IRS during 2025. Refunds were generally issued in a timely manner, though 3.6 million taxpayers experienced refund delays of seven to 14 weeks for electronic and paper filings, respectively.
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Approximately 63 percent of taxpayers received a refund, representing 104 million taxpayers, with an average refund amount of $3,167.00.
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Identity theft remains an ongoing concern. IRS delays in assisting identity theft victims continued into 2025. TAS reported that hundreds of thousands of affected taxpayers waited an average of 21 months for the IRS to resolve their cases and issue the appropriate refunds.
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The Taxpayer Advocate emphasized that staffing reductions and retroactive application of tax law have raised concerns for both IRS employees and taxpayers. While the IRS began 2025 with approximately 102,000 employees, it ended the year with 74,000. The number of customer service representatives declined by 22 percent. The report highlighted the need to align hiring decisions with operational needs, rather than relying solely on numerical workforce reduction targets.
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The number of closed audits of individual tax returns declined steadily from 2023 through 2025, falling from 518,811 closed audits in 2023 to 441,543 in 2025.
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Offers in Compromise (OICs) also drew attention in the report. While more taxpayers submitted OICs each year, acceptance rates declined. In 2023, taxpayers submitted 30,163 OICs, with 28.5 percent accepted. By 2025, submissions increased to 38,797, while acceptance rates dropped to 15.6 percent. The Taxpayer Advocate encouraged greater education around who may benefit from an OIC and under what circumstances one may be effective. OICs can provide meaningful relief in appropriate situations, but they are not suitable for everyone. For a deeper overview, see our guide, "Resolving Tax Debt with an Offer in Compromise."
TAS offers a valuable perspective on how the IRS can better serve taxpayers. The agency also assists individuals facing complex or difficult issues. In cases involving complicated financial matters, offshore assets, or payroll tax concerns, experienced legal guidance can be critical when IRS resolution efforts stall.
Addressing tax compliance concerns
If you receive a Notice of Deficiency or IRS audit letter, our experienced tax counsel can help clarify your options. At Robert J. Fedor, Esq., L.L.C., we help individuals and businesses on maintaining compliance and address IRS enforcement matters. Contact our legal team at 440-250-9709. We serve clients in the U.S. and internationally from our offices in Cleveland and Chicago.
