Tax season 2026: deadline approaches

What happened: The IRS is facing a looming deadline on July 10, 2026, to process millions of potential refunds for Americans who were charged penalties and interest during the pandemic. National Taxpayer Advocate Erin Collins highlighted this in an April 30 blog post, warning that claims must be filed on paper. Meanwhile, the tax filing deadline of April 15, 2026, has passed, and taxpayers are advised to use tools like ChatGPT for assistance. Additionally, the penalty for missed Required Minimum Distributions (RMDs) has been reduced under SECURE 2.0, affecting retirees.

Market impact: This narrative impacts the tax preparation services sector, with companies like H&R Block and Intuit (TurboTax) potentially seeing increased demand for assistance with retroactive claims. The reduced RMD penalties under SECURE 2.0 may also affect financial institutions and retirement planning services. However, the IRS's processing backlog and lack of publicization could lead to missed opportunities for refunds, impacting individual taxpayers' finances.

What to watch next: On July 10, 2026, monitor the IRS's progress in processing retroactive claims. In late 2026, observe the impact of reduced RMD penalties on financial institutions' earnings. Additionally, keep an eye on any potential IRS budget increases or staffing changes that could affect their ability to process backlogged claims.