Signal
Today's developments reveal a tax season marked by both operational challenges and policy uncertainties. The IRS is processing returns at a pace that's yielding higher average refunds ($3,676, up $350 YOY), but simultaneously grappling with significant processing delays affecting 830,000+ taxpayers due to direct deposit information issues. The AICPA's request for guidance on the Paid Family and Medical Leave Credit highlights a critical regulatory gap that affects tax planning and compliance. Meanwhile, the IRS's inclusion of payroll-related phishing schemes in its "Dirty Dozen" list underscores the evolving nature of tax fraud threats, particularly targeting digital payroll systems. These developments, combined with proposed legislative initiatives like direct tariff revenue payments, suggest a tax season that demands heightened attention to procedural accuracy, cybersecurity measures, and regulatory updates from accounting professionals.
Stories
I830,000+ Tax Refunds Delayed Due to Invalid Direct Deposit Information
IRS reports over 830,000 taxpayers will receive CP53E notices due to missing or invalid direct deposit information, with potential delays exceeding 10 weeks for some filers.
Impact · CPAs must manage client expectations regarding refund timing and adjust processing procedures to ensure accurate direct deposit information submission.
Action
Review all pending tax return submissions for complete and accurate direct deposit information; develop client communication strategy for potential delays.
IIAverage Tax Refund Increases to $3,676, Up $350 Year-Over-Year
IRS data for week ending February 28, 2026 shows average tax refund amount of $3,676, representing a $350 increase from previous year.
Impact · Higher refund amounts may indicate changes in tax withholding patterns or credits that CPAs need to analyze for optimal client tax planning.
Action
Analyze client withholding patterns and identify opportunities for tax planning adjustments based on refund trend data.
IIIAICPA Seeks Guidance on Paid Family and Medical Leave Credit Changes
AICPA has requested guidance on credit changes implemented through the One Big Beautiful Bill Act (OBBBA), citing lack of current guidance.
Impact · Uncertainty around credit implementation affects tax planning and compliance strategies for clients offering paid family and medical leave.
Action
Document all OBBBA-related credit calculations and maintain flexible adjustment strategies pending IRS guidance.
IVIRS Warns of Increased Payroll System Phishing Threats
IRS includes payroll-related phishing and impersonation schemes in 2026 Dirty Dozen list, highlighting digital payroll systems as prime targets for tax fraud.
Impact · Increased security risks for firms handling payroll processing and tax preparation through digital systems.
Action
Implement enhanced security protocols for payroll processing systems and conduct staff training on latest phishing tactics.