If last week felt like a historically long football game ending 3-0, this week felt like the Super Bowl we just watched. Technically with more “activity,” but not exactly inspiring. However, the bigger story isn’t the scoreboard, it’s credibility.
While refunds are clearly still being processed, the newly released Government Accountability Office (GAO) report (GAO-26-107456) cites IRS representations that ERC processing, aside from audits and appeals, was closed out by December 31, 2025.
TaxNow data does not support that claim.
We are observing ongoing refund activity across non-audit and appeal inventory, and that fact alone warrants attention.
The IRS processed 104 refunds totaling $27.98M this week, a marked increase from last week’s 44 refunds and $7.53M, but still generally depressing figures compared to 2025 averages.
Unlike prior weeks, where one large outlier distorted the picture, this week’s volume appears broadly distributed. Refund activity remains active, and both older and more recent filings appear to be moving.
Importantly, the reduction in average processing days this week should not be over-interpreted as either a turnaround or a reversal. When stale inventory moves, averages stretch. When newer inventory clears, averages compress. Both are positive developments, but the key signal is throughput.
What matters most: refunds are still being worked.
That stands in contrast to the narrative that processing is “closed.”
Total refunds: 104, up from 44 last week
Total dollar volume: $27.98M, up from $7.53M
Average refund: $269,058, up from $171,220
Denials: 10, up slightly from
Audits: Still 0 new audits in February
Refund activity improved. New audit activity remains largely dormant, though we continue to see Letters 6612 / IDRs tied to audit codes first posted in late 2025, indicating the IRS is slowly advancing older examinations.
TheThe GAO report highlights:
The disconnect is this:
If non-audit processing were truly completed by year-end 2025, we would not be observing triple-digit refund postings in March 2026 across the TaxNow dataset.
Refunds are still clearing. Inventory is still moving. The operational reality appears broader than the “closed” framing suggests.
Whether this is a definitional nuance or reporting optimism, the data does not indicate a fully extinguished pipeline.
For both PEO and non-PEO clients, there’s no reason to panic (yet).
We continue to see modest positive movement on 105C and 106 disallowances. Some reconsiderations by the IRS prior to appeals are occurring. Some protests are advancing to an appeals conference.
However, the pace remains nowhere near sufficient to resolve the full universe of appeals within the two-year statutory window.
At the same time, we continue hearing credible reports of the IRS ignoring, misrouting, or mishandling Form 907 requests, even when the Taxpayer Advocate is involved. That introduces additional procedural uncertainty precisely when clarity is needed most as we begin to enter the “danger zone” on denials issued in the Summer of 2024.
The volume of Letters 6612 (e.g., IDRs) tied to late-2025 audit codes also continues to rise. The IRS appears to be slowly re-engaging its older audit inventory rather than launching new waves of enforcement.
This week wasn’t the 1980 Olympic miracle, but it also wasn’t last week’s sleepy Super Bowl either.
But unresolved structural tension:
The scoreboard shows movement. The narrative remains unsettled.
Bottom line: The program may be politically “over,” but operationally, it is very much alive and in need of some (legal) steroids.
Signing off,
Kenny Dettman, CPA
Disclaimer: *𝘋𝘢𝘵𝘢 𝘴𝘦𝘵 𝘪𝘴 𝘧𝘳𝘰𝘮 𝘢𝘱𝘱𝘳𝘰𝘹𝘪𝘮𝘢𝘵𝘦𝘭𝘺 15,000 𝘣𝘶𝘴𝘪𝘯𝘦𝘴𝘴𝘦𝘴 𝘵𝘳𝘢𝘤𝘬𝘪𝘯𝘨 𝘌𝘙𝘊*
