The U.S. Government Accountability Office on Thursday reported that the Internal Revenue Service’s financial statements for fiscal years 2025 and 2026 are reliable. The annual audit found that the agency’s statements are fairly presented in all material respects.
In fiscal year 2026, the IRS brought in roughly $5.6 trillion in tax revenue to fund government operations, according to the GAO. The agency also issued approximately $670 billion to taxpayers through refunds, credits, and similar disbursements.
The GAO reported that the IRS maintained effective internal controls over its financial reporting as of Sept. 30, 2026. Tests of the agency’s compliance with selected laws, regulations, contracts, and grant agreements found no instances of reportable noncompliance for the fiscal year.
However, the audit identified continuing system limitations and control deficiencies in how the IRS accounts for federal taxes receivable and other unpaid assessment balances. According to the GAO, these issues collectively represent a “continuing significant deficiency” in internal control over financial reporting, requiring the IRS to use significant compensating procedures to produce reliable financial statements.
The GAO stated that financial statement audits provide Congress and taxpayers with an independent check on federal spending and can help agencies improve decision-making and efficiency. The report noted that continued management attention is essential to fully address the identified accounting deficiencies.
In responding to a draft of the report, the IRS expressed satisfaction with receiving an unmodified opinion on its financial records. The agency stated it is dedicated to promoting high standards of financial management and accountability and will continue working to improve its internal controls.