Numbers can carry special weight when families do their taxes.
This tax season, numbers also carry special weight for the Internal Revenue Service, the Treasury Department and the Biden administration.
It’s the first filing season since Congress passed the Inflation Reduction Act, a tax and climate bill that included $80 billion to increase high-end audits, improve customer service and upgrade technology.
The pandemic highlighted agency’s strain with its shrinking head count, and growing workload. It distributed three rounds of stimulus checks and monthly installments of child tax credit payments while processing backlogs and customer call wait times increased.
As the filing season concludes Tuesday, Treasury and IRS officials say the funding is already starting to show results. Call waits are dropping and tax return processing is more efficient, they say. The bill passed during the summer along party lines when Democrats controlled both chambers.
“The pandemic highlighted agency’s strain with its shrinking head count, and growing workload. ”
“This was really the first tax season we’ve had since 2019 where the IRS and the nation were on normal footing,” said Danny Werfel, the newly-confirmed IRS commissioner. “So this was a test for the IRS, and I’m pleased to report that the IRS delivered a solid 2023 filing season by any measure.”
Others gave a thumbs up, so far at least.
“The filing season has gone much more smoothly this year than in recent years,” said IRS National Taxpayer Advocate Erin Collins. “The IRS has generally eliminated its backlog of Forms 1040, it’s answering the phones, and there haven’t been any major glitches. Overall, a huge improvement.”
Still, Collins said her “one major concern” is a backlog of correspondence and amended tax returns.
The American Institute of CPAs said it was “encouraged to hear reports that show improvements in customer service from the IRS this filing season,” said Peter Mills, senior manager for tax policy & advocacy at the organization.
The organization is looking forward to see how the IRS delivers on promises to improve customer service and end the backlog, he said.
But it is taxpayers themselves who can decide what counts as a passing grade for the tax man. Here’s some numbers to inform their decision and paint the picture of the filing season nearing its end:
$2,878
That’s the average size of refunds as of April 7, according to IRS statistics. That’s around 9% smaller than the average $3,175 amount at the same time last year.
As of early April, the IRS has handled more than 100 million individual returns, and is expecting more than 168 million returns before the year is done.
Refund amounts are lower this year because pandemic-era tax credits have reverted to smaller, pre-pandemic levels, experts have noted. The IRS can’t set the size of credits. Those are levels for Congress to determine.
The IRS can focus on the speed in how it turns around refunds, especially for paper returns that have bogged down the agency and the taxpayers waiting for checks. In the next five years, the plan is to end paper backlogs by shifting to completely digital correspondence, said Wally Adeyemo, the Treasury Department’s deputy secretary.
Some of that capacity has already started happening season, he noted.
20.6 million
That’s the number of extensions that IRS is estimating taxpayers will seek this year. That would be higher than the projected 20 million extension last season and up from the 14.2 million received in 2021.
The extension gets six more months to file a return, up until Oct. 16, but it doesn’t allow more time to pay any taxes owed. Anywhere from a fifth to a quarter of all tax returns come to the IRS around the last two weeks of the season, according to an IRS spokesman.
6.5 million
That’s the number of taxpayer phone calls that IRS customer service answered this filing season, through early April. That’s 2.4 million more answered phone calls compared to the same point last year, Werfel and Adeyemo noted.
With the IRS hiring more than 5,000 people for phone assistance, wait times have dropped to four minutes this year. Last year, a person waited an average 27 minutes before they talked to a person — that is, if they talked a person instead of getting disconnected.
A wide majority of people, 92%, say the IRS should focus on improved phone- and in-person assistance, according to recently-released polling and data from the agency. More than a quarter, 78%, said they were satisfied with their IRS interactions during 2022, up from 75% a year earlier.
This season, the IRS re-opened a number of in-person assistance centers through the country and helped 428,000 people with their taxes, according to Adeyemo.
That’s over 100,000 more people compared to last year, Adeyemo said.
2.26 million
That’s the number of unprocessed individual tax returns the IRS had, as of April 1. That includes the 2022 returns pouring in as this tax season concludes, but it also includes 1.7 million individual returns with errors to fix and 558,000 paper returns.
The IRS started 2023 with a backlog of 7.1 million, according to Werfel. The extra staff and more document capacity has helped cut the numbers, he said.
“For individual tax returns that came in with no errors we are fully caught up. We have zero backlog,” he said. “We are continuing to work through the backlog that exists where we have errors to resolve and where we have amended returns.”
Collins has said her remaining worry is the backlog of returns and correspondence as the IRS focuses so many staffers to work the phones.
“Now that the filing season has ended, I believe it is critical that the IRS prioritize getting its paper inventories under control and prevent a carryover of unprocessed amended returns, suspended returns, and taxpayer correspondence into 2024,” she said.
Werfel said the pace clearing returns in waiting should increase. “As filing season wraps up, we’re able to reset some of our staff deployments.”
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