2026 Filing Season: Preliminary Observations on IRS Performance

Overview

GAO’s preliminary observations on the 2026 filing season show that IRS return-processing performance broadly matched 2025 in aggregate, but paper return processing and refund issuance experienced significant delays. IRS processed about 98 percent of roughly 177 million returns, but unavailable processing systems and reduced staffing slowed programming updates and lengthened paper return turnaround; about half of paper returns were routed to outside vendors for scanning. Refunds were delayed for some taxpayers as IRS phased out paper check refunds per a 2025 executive order and issued about 4.2 million notices requesting direct-deposit information. Customer service shifted toward self-service and automation (automation answered a larger share of calls), while average call wait times and reductions in in-person service reflect constrained staffing and fewer open locations. For contractors in document processing, scanning and imaging, IT services, tax-administration support, and business process outsourcing, this creates immediate demand signals (scanning/ingestion capacity, secure handling of taxpayer data, automation for self-service and notices) and elevated compliance expectations (see IRS Publication 1075, NIST 800-53, FedRAMP (Federal Risk and Authorization Management Program) tags). Action is needed now to validate capabilities, confirm compliance posture, and position for short-term tasking or solicitations.

Immediate Actions (This Week)

• [ ] Monitor for official solicitations, task orders, or agency notices tied to IRS/Treasury filing-season support — prepare to attach capability statements and past-performance summaries.
• [ ] Perform an internal capability inventory for document scanning/imaging throughput, secure transport, and vendor-managed scanning capacity; identify gaps versus expected surge demand.
• [ ] Conduct a focused compliance check: confirm current controls and documentation that map to IRS Publication 1075, NIST 800-53, and any FedRAMP-related requirements indicated in your service stack.

Short-Term Actions (30 Days)

• [ ] Prepare a short, modular proposal package (capability statement, SOC-type evidence or equivalent, sample SOPs for secure scanning and data handling) that can be delivered quickly in response to a tasking or request for information.
• [ ] Run a security and process tabletop for paper‑to‑digital workflows and refund-notice handling, validating chain-of-custody, encryption-at-rest/in-transit, and role-based access controls against IRS Publication 1075 and NIST 800-53 expectations.

Long-Term Actions (90+ Days)

• [ ] Formalize and document a compliant controlled-unclassified information (CUI (Controlled Unclassified Information)) handling program aligned to IRS Publication 1075 and NIST 800-53; ensure operational procedures, training, and audit trails are in place for recurring audits.
• [ ] Scale operational capacity and SLAs (scanning throughput, image quality, turnaround times, customer-notice handling) and bake those metrics into capture materials and pricing models for follow-on opportunities.

Compliance Checklist

• [ ] IRS Publication 1075: Establish and document CUI/TPI handling policies, including personnel vetting, data handling, secure transport, retention and destruction procedures, and incident reporting.
• [ ] NIST 800-53: Map and maintain control implementation statements for applicable security controls (access control, audit and accountability, system and communications protections, incident response).
• [ ] FedRAMP: If providing cloud-hosted services that will process taxpayer data, ensure FedRAMP authorization posture is evaluated and documented; maintain evidence of authorization or an approved path to authorization.

Resources

• IRS Publication 1075 — regulation text and handling guidance (refer to your document library or agency site for the official text)
• IRS — agency guidance and filing-season materials (monitor official IRS publications)
• Treasury — agency notices and policy guidance (monitor official Treasury releases)
• GAO report GAO-26-109074 — preliminary observations and figures referenced in the summary
• Related internal guides:
• Secure Operations Guide (/insights/secure-operations-guide)
• CMMC (Cybersecurity Maturity Model Certification) Compliance Guide (/insights/cmmc-compliance-guide)
• CUI-Safe CRM Guide (/insights/cui-safe-crm-guide)

How Cabrillo Club Automates This

Cabrillo Signals War Room — Already detected this event and delivered this briefing within minutes. War Room continues monitoring IRS and Treasury publications, GAO releases, and executive-order follow-ups so you receive immediate alerts when filing-season performance issues, refund-policy shifts, or vendor-scanning opportunities appear. For subscribers, War Room flags changes that could affect demand for document-processing services and customer‑service automation.

Cabrillo Signals Match Engine — When filing-season dynamics shift (e.g., higher demand for scanning and notice handling), Match Engine automatically rescors your opportunity pipeline. It reprioritizes opportunities where your past performance and capability match document processing, secure scanning, and tax-administration support, updating keyword relevance and agency alignment in real time so your capture team sees the highest-value prospects first.

Cabrillo Signals Intelligence Hub — Intelligence Hub tracks affected agencies (IRS, Treasury), the NAICS codes in your segmentation, and contract vehicles. Use saved searches and alert rules to notify capture and BD teams when follow-on solicitations or RFIs appear that align with this filing-season profile, including requests for scanning, imaging, or secure customer-notice support.

Proposal Studio (Proposal OS) — Proposal Studio generates first-draft technical approaches and compliance matrices tailored to events like this one. It pulls relevant past-performance examples, drafts security and CUI handling language aligned to IRS Publication 1075 and NIST 800-53, and populates your win-theme library so you can push rapid-response bids without rebuilding boilerplate.

Proposal Studio Workflow Tracker — The Workflow Tracker enforces a 9-gate capture workflow, routing rapid reviews to security, contracts, and legal for IRS Publication 1075 and FedRAMP-related checks. It tracks supplier certifications, evidence packages, and produces an audit-ready submission bundle so you can respond quickly while maintaining compliance.

Explore these features in your Cabrillo Club console to convert this filing-season disruption into defensible capture opportunities and to ensure your compliance posture is clearly documented for evaluators.

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