After several weeks of unusually strong refund activity, this week delivered a sharp reversal, and an all-time low since processing resumed in mid-2024. The IRS issued just 43 refunds, a level we haven’t seen at any point post-moratorium. While the drop is steep, it’s not entirely unexpected: ERC processing has always been cyclical and erratic, and without fail, periods of strong output are often followed by quieter weeks. The silver lining? Refund activity did not stop, audits remained at a standstill, and the claims that did move this week were solid, with an average payout of $569,556. Still, this week serves as a reminder that even in a year filled with surprises, all good things must temporarily come to an end, at least for now.
📉 Total Refunds: 43, down sharply from last week’s 157.
This marks the lowest weekly total since the moratorium was lifted, underscoring a meaningful pause in activity.
📉 Total Dollar Volume: $24.49 million, compared to last week’s $90.5 million.
The decline aligns with the slowdown in refund count, though dollar volume remains respectable, given only 43 payments were released.
📉 Average Refund: $569,556, a slight dip from last week’s $576,474.
Despite the slowdown, the refund size remains historically strong, indicating that larger claims are still being processed even during quieter periods.
📈 Average Days Between Filing and Refund: 459, up slightly from last week’s 456.The gradual increase reflects continued clearing of older 2024 claims alongside 2025-filed submissions.
1. Government Reopens, While Practitioners Remain Prepared for Delays - With the federal government now officially reopened, IRS employees are returning to their desks and confronting a massive shutdown-era backlog, but early signs suggest that meaningful progress on ERC appeals remains nonexistent.
Although some revenue agents and Taxpayer Advocates contacted taxpayers within hours of returning, practitioners warn that enforcement functions and the Independent Office of Appeals may be among the slowest to recover, particularly after losing nearly a third of their staff this year and furloughing another thousand during the shutdown.
Experts note that while the IRS is coming back to life, the combination of reduced personnel, a historic backlog, and competing demands heading into the 2026 filing season could erase the gains Appeals made earlier in 2025. For ERC filers awaiting appeal decisions, especially those stuck in nondocketed cases, the message remains unchanged: the government may be open again, but ERC appeals activity hasn’t shown any signs of reopening at all.
2. Trump Withdraw Chief Counsel Nod - President Trump has withdrawn his nomination of Donald Korb to serve again as IRS chief counsel, abruptly ending what had become an increasingly contentious confirmation process. Korb, who previously held the role under President George W. Bush faced sharp criticism from Senate Democrats over private remarks about former IRS officials, while recent reporting on his past political donations drew backlash from conservative commentators.
Although the Senate Finance Committee advanced his nomination last month, escalating pressure from both sides ultimately derailed the effort. The withdrawal halts what would have been the first nonconsecutive return to the IRS chief counsel post in agency history.
3. DOJ Nabs ERC Fraudster - A federal jury has convicted New Jersey tax return preparer Leon Haynes for orchestrating one of the largest known ERC-related fraud schemes, involving over $150 million in false pandemic tax credit claims. Prosecutors showed that Haynes inflated employee counts and wages, often without his clients’ knowledge, across more than 1,600 quarterly returns, claiming multiple credits on the same wages and even filing fraudulent claims for himself.
The jury found him guilty on 15 counts of aiding the filing of false returns, as well as mail fraud and tax evasion, after a trial that concluded November 10. Haynes now faces significant prison time at his March 2026 sentencing, with potential penalties ranging from three to twenty years per count.
Despite the scale of the case, the DOJ has not formally announced the conviction, even as ERC-related fraud remains a major enforcement priority for IRS Criminal Investigation.
TaxNow's Take:
While the headline this week is unquestionably the all-time low refund volume, we hope that the drop reflects a temporary deceleration rather than an intentional shift in IRS posture. Historically, weeks like this are often followed by re-acceleration, but there are never any guarantees.
The broader backdrop, with the resumption of the government (at least for the moment) still provides reasons for optimism. Refund size remains strong, older claims continue to move, and enforcement activity is pleasantly quiet. Momentum may ebb and flow, but the pipeline remains open.
Signing off!
Kenny Dettman, CPA
Disclaimer: *𝘋𝘢𝘵𝘢 𝘴𝘦𝘵 𝘪𝘴 𝘧𝘳𝘰𝘮 𝘢𝘱𝘱𝘳𝘰𝘹𝘪𝘮𝘢𝘵𝘦𝘭𝘺 14,000 𝘣𝘶𝘴𝘪𝘯𝘦𝘴𝘴𝘦𝘴 𝘵𝘳𝘢𝘤𝘬𝘪𝘯𝘨 𝘌𝘙𝘊*
