The Shadow
WASHINGTON ̶ The Internal Revenue Service today announced record setting performance on behalf of American taxpayers in fiscal year (FY) 2026. Following the passage of President Donald J. Trump’s landmark Working Families Tax Cuts, the IRS collected the highest tax revenue in history and delivered record high refunds, to more people, and faster than ever before.
In FY 2026, the IRS collected a record-setting $5.6 trillion in taxes, an increase of nearly 5 percent from the previous year, representing most of the revenue that supports the operations of the U.S. government. At the same time, the average tax rate paid by taxpayers declined for all income levels for returns filed in 2026. Based on individual income tax returns filed through mid-July, the aggregate average federal income tax rate declined across all income categories for Tax Year 2025. The overall average tax rate fell to 12.6 percent, a decrease of 4 percent from 2025, showing that Americans benefited from the President’s signature tax cut law.
“Under the leadership of President Donald J. Trump, the IRS delivered to America’s working families historic refunds due to the tax cuts enacted in the Working Families Tax Cuts, which represent the cornerstone of the administration’s economic agenda,” said IRS Chief Executive Officer Frank J. Bisignano. “With our dedicated workforce, we delivered a successful tax filing season and continue to transform the IRS into a Digital-First agency that provides the best possible experience for taxpayers, improves collections, and safeguards privacy.”
During the filing season, the total dollar amount of refunds claimed increased by 17 percent over last year and the average refund was up by 11 percent with about 90 percent of filers who filed electronically receiving refunds in less than 21 days. The total amount of refunds dispersed to Americans increased by over 20 percent from 2025 to 2026.
Improved Service to Taxpayers
Taxpayers increasingly turned to IRS digital services in 2026, using online tools to quickly access information, check refund status and make payments. IRS.gov recorded more than 954 million visits and taxpayers conducted nearly 469 million Where’s My Refund? status checks.
Individual Online Account users reached approximately 37.6 million, a 34% increase from the prior year, with 224 million account logins. Payments made through IRS Online Accounts increased 57%, reaching more than $133.6 billion. Tax Professional Account users increased 57% to 513 thousand users while payments through the Business Tax Account surged nearly 250% to $726.6 million. This shows how impactful and effective the IRS digital strategy is in serving taxpayers.
IRS also launched the new IRS mobile app, expanding the agency’s digital services to give taxpayers more ways to securely access IRS tools and account services from their mobile devices. During the first five days after launch, over 140,000 customers downloaded the app with over two-thirds of those customers choosing the new personalized experience using authentication.
This filing season, 12 percent more refunds were issued via direct deposit compared to last year. This advances the goal of the Executive Order 14247, which requires eliminating paper checks to reduce administrative costs, speed payment processing and defend against tax refund fraud. The agency also made major strides with the Zero Paper initiative, which converts physical returns into digital data and reduces the number of paper returns filed. Progress was especially strong for employment tax returns, with more than 90 percent of Form 940 returns and more than 80 percent of Form 941 returns processed electronically.
Protecting Taxpayer Dollars
The IRS protected approximately $38 billion in tax revenue from identity theft refund fraud in fiscal year 2026, reflecting its continued commitment to protecting taxpayers and the integrity of the tax system. Working through the Security Summit, a partnership among the IRS, state tax agencies, and private sector companies and associations, the IRS strengthened its ability to detect and stop fraudulent returns, prevent refunds from reaching identity thieves, and quickly share information about emerging scams and threats. The IRS and its partners also conducted public awareness campaigns, including National Tax Security Awareness Week and the Protect Your Clients, Protect Yourself campaign, to help individuals, businesses, and tax professionals recognize scams and protect their personal and financial information.
The IRS also made it easier for the public to report suspected wrongdoing by improving its fraud referral system and launching a new online reporting option. Taxpayers can now confidentially report suspected tax fraud, scams, tax evasion, and other tax related illegal activity by selecting the Report Fraud button on the IRS.gov homepage or visiting IRS.gov/SubmitATip. These improvements address longstanding barriers that limited the IRS’s ability to fully use public referrals and represent important progress in strengthening fraud detection, addressing noncompliance, and protecting taxpayers.
Trump Accounts
President Trump’s historic Working Families Tax Cuts also included the creation of Trump Accounts, individual investment accounts for children under the age of 18 designed to grow with the U.S. economy and build long-term savings. Today, nearly 70 million Trump Accounts are open for all children. 27 million have already received funds from families, friends, generous donors, and the U.S. government, which is contributing $1,000 to each child born between January 1, 2025, and December 31, 2028.
The IRS is actively promoting the adoption of Trump Accounts through communications with taxpayers and tax professionals. Trump Accounts represent one of the most significant investments in current and future generations in our nation’s history, by giving every American child a stake in our country’s success and a strong financial foundation for the future.
