The Capacity Catastrophe

The Season You Saw Coming TIGTA — “The Internal Revenue Service’s Readiness for the 2026 Filing Season” (memorandum, Jan. 26, 2026: staffing down ~19,000/19% to October 2021 levels; key processing inventories at ~2.0 million items in Dec. 2025 vs. 871K pre-pandemic; phone level-of-service goal lowered to 70% from 85%; last time LOS was ≤70% was the 2022 filing season, at 18% — “fewer than one-in-five incoming calls”; Accounts Management onboarded 2,300 of 3,500 approved hires, with new hires trained only to screen calls and answer basic refund questions; $2.6B in interest paid to individuals in Processing Year 2025) Journal of Accountancy — “About a quarter of callers to two IRS lines got poor service, TIGTA says” (June 16, 2026; TIGTA June 10 report: 26% of a 200-call sample on two lines, Feb. 15–May 15, 2025, did not receive quality service; extrapolated to ~1 million of 3.8 million callers) TIGTA — “Taxpayers Continue to Experience Customer Service Issues…” (Report 2026–10–0030, June 2026 — underlying report for the above) Federal News Network — “After missing hiring goals, IRS dials back taxpayer phone assistance targets,” Jory Heckman (Jan. 2026; National Taxpayer Advocate: LOS metric covers only ~a quarter of total call volume, and the IRS exceeded the 85% LOS metric in fiscal 2024; ~35 of 360 Taxpayer Assistance Centers closed as of Dec. 2025) BCG — “How Retailers Can De-Risk the 2025 Holiday Shopping Season,” Alex Barocas and Shilpa Sharma (Sept. 17, 2025; “beautifully wrapped disappointment”; reshape the plan to demand / execute with excellence / tune and scale with agility; holiday command center) Retail Dive — “Smaller retailers face their toughest holiday season in years,” Daphne Howland (Oct. 14, 2025; Xero research: 37% of small business owners worry about Black Friday traffic, 32% about holiday inventory, 30% about burnout; Astrid Vigeland of Folly 101, Portland, Maine) Xero — U.S. Black Friday survey (media release cited by Retail Dive) The Feature: The Puddery Houston Public Media — “The Puddery in Pearland temporarily closes due to ‘Keith Lee effect’ that prompted spike in customers” (Dec. 7, 2023; one-woman show; Nov. 28, 2023 review; 9/10, “immaculate,” “absolutely insane”; lines within hours and for ~10 days; shipping suspended; urgent care visit and strained chest muscle; “Usually I would just thug it out”; closed until Saturday, Dec. 9) CultureMap Houston — “TikTok food critic Keith Lee awards $50,000 to Pearland dessert shop,” Eric Sandler (Mar. 25, 2025; Toast partnership; food trailer purchase; move to larger space in the same shopping center; best banana pudding he’s ever had) KHOU — “The Puddery owner talks life after TikTok food critic Keith Lee’s visit” Click2Houston — “Pearland dessert shop The Puddery closed for days after going viral due to ‘Keith Lee effect’” (Dec. 7, 2023) The Counterweight: Fireworks Stands Freakonomics Radio Network — The Economics of Everyday Things: “Fireworks Stands,” Zachary Crockett (Phantom Fireworks VP Alex Zoldan; ~1,500 pop-up tents; consumer fireworks = $2.2B/year; “80 percent of our entire year sales are one month”; “90 plus percent planning and 10 executing”; typical stand grosses $25K–$60K, ~20% net considered good; ~1,000 California stands run by nonprofits; six-week shipping from China, next year’s orders placed by July) Marketplace — “How much profit do fireworks stands make?”, Janet Nguyen (Dec. 2022; PyroSpot’s Craig LaFleur: 20% margin is “a great job”; BU economist Jay Zagorsky: ~3x wholesale markup; ~10 weeks full-time work plus ~6 weeks part-time prep for a seasonal stand) Company Mentioned Johns & Taylor — blog and newsletter