The IRS has released its latest filing season snapshot, covering returns received through March 6, just over a month before the April 15 deadline. So far, filing activity is running slightly behind last year’s pace, with about 60.7 million returns received compared with 61.4 million at the same point in 2025. Processing totals show a similar trend. The gap isn’t dramatic, but it suggests that some taxpayers may be waiting longer to file this year.

Refunds, however, are telling a different story. The average refund has climbed to $3,676, up more than 10% from last year, largely due to changes tied to the One Big Beautiful Bill Act (OBBBA). That said, the increase isn’t as large as some policymakers had predicted. While some had suggested refunds might jump by $1,000 or more, early IRS data shows the average increase so far is about $352—much smaller than many taxpayers and tax pros expected.

There are other concerns about refunds. Congressional Democrats have raised concerns about new IRS notices being sent to taxpayers whose refunds have been delayed as the agency shifts away from issuing paper checks. Lawmakers say more than 530,000 taxpayers have already received CP53E notices, with another 300,000 expected. The notice is sent when the IRS cannot process a refund through direct deposit and asks taxpayers to update their banking information.

The policy reflects a broader federal push toward electronic payments, but critics warn it could create confusion and longer delays, especially for taxpayers who do not use online IRS accounts or rely on paper checks. Under the new approach, refunds may be temporarily frozen until taxpayers update their direct deposit details or wait for the IRS to eventually issue a paper check, a process lawmakers say could delay some refunds by more than 10 weeks.

The push has also confused taxpayers when it comes to payments. Importantly, you can still write a check to pay your taxes and to make estimated tax payments. While the goal is to eventually move over to electronic payments, the IRS has advised that it will continue to accept traditional payments (of course, it wants to get paid).

With all of this confusion, taxpayers are looking for help. But where are they turning? If you guessed AI, you’re partly right. Some taxpayers are turning to AI chatbots for help with their taxes. Tools like ChatGPT, Gemini, Copilot, and Claude are increasingly being used alongside traditional tax software and professional advice. A new survey from data analytics company Qlik finds that about 11% of taxpayers say they’ve used or plan to use AI for tax-related help, often to ask questions, identify possible deductions, or review their returns before filing.

Surprisingly, the most active users aren’t the youngest taxpayers. Instead, mid-career professionals aged 35 to 44 (largely older millennials) appear most willing to rely on AI tools when making tax decisions.

Still, privacy concerns remain a major barrier: about 40% of Americans say they would never enter personal or financial information into an AI system, citing fears about data exposure. For now, AI’s role in tax preparation looks less like a replacement for tax software or tax pros and more like a digital assistant helping taxpayers try to understand the rules.

If you’re wondering how tax pros feel about this, I’d say pretty good—at least, that’s my experience. I was asked on social media about the use of AI in tax and where the line might be. I said that I see it as facilitating planning and discussions, which is half the battle when it comes to tax. As an example, a client recently used AI to articulate how she wanted to manage her business. It couldn't get her there, but it could point her in the right direction so that I could make it happen. More information is typically better when it comes to tax–but it’s not a replacement for context and human experience.

So, what about how that might play out in court? In a recent episode of Tax Notes Talk, U.S. Tax Court Chief Judge Patrick Urda discussed how the court is grappling with the growing role of generative AI in the legal system. Urda noted that the technology is a frequent topic of conversation among judges and court administrators as they try to understand how it might affect litigation and court operations. While AI tools are increasingly showing up in legal work and some court filings, Urda suggested the court is approaching the technology cautiously, focusing on how it might help improve efficiency without compromising accuracy.

Because tax law can be highly technical and fact-specific, he emphasized the importance of understanding the potential benefits and limitations of AI-generated research or arguments. For now, the Tax Court is observing how other courts and the judiciary’s administrative office approach technology, while judges continue to learn how AI might shape legal practice.

The IRS has also been dipping its toes into AI. The IRS is collecting enormous amounts of data and has been exploring tools such as AI and advanced analytics to improve efficiency, raising questions about whether technology can compensate for declining staffing and funding in the years ahead. (My quick read so far: absolutely not.)

The IRS faces a particularly difficult challenge as it balances taxpayer service, enforcement, and the rollout of major new tax legislation. At the same time, policy shifts and shrinking resources are reshaping the government's approach to tax enforcement. It will be interesting to see how the IRS tackles oversight of the tax system with fewer people and greater reliance on data and automation.

A lot of those answers will come from the top–and Congressional Democrats have been questioning who is actually running the IRS. In a letter this week, Senate Finance Committee Ranking Member Ron Wyden, Senate Democratic Leader Chuck Schumer, and Senator Elizabeth Warren warned that Treasury Secretary Scott Bessent’s authority to serve as Acting IRS Commissioner appears to have expired under the Federal Vacancies Reform Act. According to the senators, the law’s 210-day limit for acting service ended on March 6, and no nominee for a permanent commissioner has been sent to the Senate.

Treasury acknowledged on March 13 that Bessent is no longer serving as Acting Commissioner but says he still retains authority to perform certain duties tied to vacant Treasury offices. Meanwhile, day-to-day IRS operations are reportedly being handled by a newly created “Chief Executive Officer” role—currently held by Social Security Commissioner Frank Bisignano—a position critics say Congress never authorized.

It has made for an interesting tax season so far. With about a month left, we’ll be on the watch for new developments.

Enjoy your weekend—eat some pie on Pi (3/14) Day or have a stout in advance of St. Patrick's Day if you're feeling festive,

Kelly Phillips Erb (Senior Writer, Tax)

This is a published version of the Tax Breaks newsletter, you can sign-up to get Tax Breaks in your inbox here.

This week, a reader asks:

I switched crypto platforms from Coinbase to Robinhood this year. Do I have to tell the IRS?

Great question. The short answer is no. But here’s why—and what else you need to know.

On Form 1040, the crypto (now “digital asset”) question appears near the top of the return, just below the name and address section. It asks: “At any time during [tax year], did you: (a) receive (as a reward, award, or payment for property or services); or (b) sell, exchange, or otherwise dispose of a digital asset (or a financial interest in a digital asset)?”

Taxpayers must check Yes or No.

The IRS intentionally phrased the question broadly to get taxpayers to identify potential digital-asset activity. The box doesn’t technically ask whether you owe tax. Instead, it asks whether you engaged in transactions that could produce taxable income or gain.

Simply moving crypto between wallets you own, or transferring it between accounts you control on different platforms, is not a reportable event. But you should check Yes if you received digital assets as payment or rewards, earned mining or staking income, received tokens from an airdrop or hard fork, sold crypto for cash, exchanged one digital asset for another, or used crypto to purchase goods or services.

One quick caveat: That’s the answer as it relates to federal income tax. Other reporting may apply, depending on your circumstances. For example, currently, crypto is generally not reportable on FBAR (the Report of Foreign Bank and Financial Accounts, required when the total of certain foreign financial accounts exceeds $10,000) if it is held in a foreign account that contains only virtual currency. However, if the foreign account also holds fiat currency or otherwise qualifies as a traditional foreign financial account, it may still trigger FBAR reporting. Since foreign reporting is growing more complicated, if you have questions, it’s always a good idea to ask your tax professional.

Statistics, Charts, and Graphs

The U.S. Department of State has reduced the fee for renouncing citizenship from $2,350 to $450, reversing the steep increase imposed in 2015 (and resulting in a drop of revenue). For Americans thinking about expatriation, the change may feel like a long-overdue win. Critics had argued for years that the United States charged one of the highest administrative fees in the world to give up citizenship, effectively discouraging people from exercising the internationally recognized right to change nationality. The new rule returns the fee to the level it was at when first introduced in 2010.

Until 2010, the United States charged nothing at all for renouncing citizenship. That changed as expatriations began to rise sharply after the enactment of the Foreign Account Tax Compliance Act (FATCA), which requires foreign financial institutions to identify and report accounts held by Americans abroad. As U.S. embassies and consulates handled more renunciation appointments, the State Department concluded that a fee was necessary to cover administrative costs. In 2015, the government increased the charge to $2,350—more than five times the previous amount—arguing that the higher fee reflected the growing workload involved in processing expatriation cases.

Even with the lower fee, renouncing U.S. citizenship remains more complicated than just paying for consular services. The tax rules that apply to expatriation can be extensive. Some individuals might face the so-called exit tax, which treats them as if they sold all their global assets the day before renouncing and taxes unrealized gains above a certain exemption amount. Other regulations can impact pensions, gifts, and inheritances involving former citizens. The fee reduction is meaningful, but it’s not the only financial piece involved in the decision to give up U.S. citizenship.

Taxes From A To Z: J Is For Jurat

A jurat is the certification at the end of a document where the signer swears or affirms that the contents are true. On a federal tax return, the jurat is the familiar statement above the signature line declaring that the taxpayer has examined the return and that it is “true, correct, and complete” under penalties of perjury.

The term itself isn’t used much in everyday conversation—people usually just say “the penalties-of-perjury statement”—but it is very important. The jurat is what makes the return legally valid. It helps confirm that the document is a legitimate “return” for various procedural reasons, including statutes of limitations and specific penalties.

Historically, sworn statements required a notary, but that would have made routine filings impractical. The modern tax-return jurat exists largely because Congress wanted to eliminate the need for notarized tax filings. The familiar tax-return language is essentially a statutory substitute for a sworn oath: by signing, the taxpayer is legally attesting to the truth of the return just as if they had sworn before a notary.

Occasionally, taxpayers try to sidestep some of this by signing the return “under protest” or by adding similar language near the jurat. Courts have generally rejected those attempts. In some cases—especially in tax-protester litigation—courts have treated such annotations as irrelevant or even as evidence of frivolous positions. In contrast, if a taxpayer alters or crosses out the jurat or refuses to sign it, the document may fail to qualify as a valid return.

The IRS building in Washington, D.C. has the saying, “Taxes are what we pay for civilized society” on its facade. Who said it?

(A) Justice Benjamin Cardozo

(B) Justice Oliver Wendell Holmes Jr.

(C) Senator Russell Long

Find the answer at the bottom of this newsletter.

Positions And Guidance

The IRS recently unveiled its revised Tax Withholding Estimator to reflect changes to credits and deductions under OBBBA, including no tax on tips, no tax on overtime, and other tax benefits. The free tool that helps taxpayers estimate the amount of federal income tax to withhold from their paychecks now for the taxes they will owe next year.

The IRS announced that it is extending weekly office hours at more than 200 Taxpayer Assistance Centers nationwide to provide taxpayers with additional time to receive in-person assistance during the filing season.

The links, clips, and tax takes readers loved (and a few you may have missed):

Warning: New IRS Instructions Limit ‘No Tax On Tips’ Deduction For Gig Workers

How Confident Can You Be In The Person Preparing Your Tax Return?

You can find last week’s newsletter here.

Tax Filings And Deadlines

📅 March 16, 2026. Deadline for partnership and S corporation returns to be filed with the IRS (or to request an extension).

📅 April 15, 2026. Deadline for individual tax returns to be filed with the IRS (or to request an extension).

Tax Conferences And Events

📅 March 18, 2026. Forbes Tax AMA (ask me anything) on Reddit, 1-2 p.m.

📅 March 30, 2026. Forbes Tax members only event, 3-4 p.m.

📅 May 7-9, 2026. American Bar Association Section of Taxation May Tax Meeting. Marriott Marquis, Washington, DC.

📅 June 3-6, 2026. Tax Retreat—The Anticonference. San Antonio, Texas.

📅 June 8-11, 2026. AICPA Engage. ARIA Resort & Casino, Las Vegas & live online.

Holmes, Jr. was a U.S. Supreme Court justice (1902–1932) credited with the famous tax quote, which appears in his dissent in Compania General de Tabacos de Filipinas v. Collector of Internal Revenue, though it’s often cited more broadly in tax discussions.

Senator Russell Long (a Democratic Senator from Louisiana) is also credited with a famous tax quote, though his is more pithy. He said, “Don’t tax you. Don’t tax me. Tax that fellow behind the tree.” One of his major achievements was helping create and expand the Earned Income Tax Credit (EITC) in the 1970s, which provides tax relief to lower-income workers.

We’d love your thoughts. What’s helpful? What’s confusing? What tax topics do you want more of? Email me directly—I read every message.

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