IRS Research & What Tax Pros Should Watch in 2026
As the 2026 tax season begins, professional tax preparers face a shifting compliance landscape shaped by new IRS research, audit priorities, and taxpayer behavior. Understanding these changes is key to helping clients avoid costly mistakes — and keeping your practice efficient and audit-ready.
1. IRS Audit Shifts: More Focus on High-Income and Complex Returns
Recent enforcement updates from the IRS point to a continued pivot toward auditing higher-income individuals, passthrough entities, and complex business returns. This stems from enhanced funding and the IRS’s commitment to closing the tax gap at the top income levels.
What This Means for You:
- Clients with Schedule C, K-1s, or multi-source income may need extra documentation
- More AI-driven flagging of anomalies or underreporting
- Expect deeper scrutiny around deductions and basis calculations
In TaxAct Professional: Use built-in alerts and document checklists to prepare audit-ready returns for high-risk profiles.
2. 1099-K Confusion Continues
Although the IRS has delayed full enforcement of the $600 1099-K threshold, many third-party platforms will still issue these forms, leaving taxpayers confused about what income is taxable.
What to Watch:
- Clients reporting 1099-Ks for personal transactions (e.g., splitting rent or gifts)
- Misunderstood business income from side gigs
- Amended returns due to 1099-K mismatches
Pro Tip: TaxAct Professional makes it easy to enter, flag, and reconcile multiple 1099-Ks with built-in import tools.
3. IRS Tech Modernization—With Growing Pains
The IRS continues to digitize paper processing, launch pilot tools for taxpayer accounts, and streamline e-file. While this creates efficiencies, it also brings occasional technical hiccups.
Expect:
- More automated correspondence and document requests
- Temporary service outages or filing delays
- Updated security procedures and verification flows
How to Respond:
TaxAct Professional helps mitigate filing disruptions with up-to-date e-file support, batch filing tools, and status monitoring for rejections and acknowledgements.
4. New Tax Law Guidance: Energy Credits, Inflation Changes & More
The IRS is still issuing clarifying guidance on several Inflation Reduction Act provisions, including clean energy home improvements, EV credits, and minimum corporate tax rules. Plus, annual inflation adjustments will impact thresholds, deductions, and contribution limits.
What to Watch:
- Mid-season form updates or new eligibility rules
- Changes to client tax liability projections
- Late IRS guidance potentially delaying return processing
Stay Ready: TaxAct Professional auto-updates tax law changes and forms, so you’re not caught off guard mid-season.
5. Crypto and Foreign Account Reporting on the Rise
The IRS continues to prioritize enforcement in digital asset reporting and foreign holdings. Taxpayers must disclose crypto activity and foreign financial accounts when applicable—and many remain unaware.
You Should:
- Ask every client about crypto transactions and foreign assets
- Review thresholds for FBAR/Form 8938 filing
- Watch for expanded reporting requirements in 2026 and 2027
Tip: Use client organizers in TaxAct Professional to surface digital asset questions early.
Final Advice for Tax Pros This Season
To stay ahead in 2026, tax professionals need to anticipate where IRS enforcement is headed—and use tools that simplify compliance. Here’s what we recommend:
- File early and electronically to avoid delays and reduce errors.
- Educate clients proactively about form changes, 1099-Ks, and digital assets.
- Use TaxAct Professional’s built-in guidance and alerts to reduce risk and increase efficiency.
- Check for updates regularly—IRS guidance evolves throughout filing season.
Stay Informed with TaxAct Professional
Visit our Professional Resource Center for filing updates, FAQs, and IRS bulletins. TaxAct is here to support your success through every challenge this tax season brings.