IRS Issues $659 Million in Tax Refunds for 2023 Fiscal Year
The Internal Revenue Service (IRS) has announced that it issued $659 million in tax refunds for the 2023 fiscal year, marking a 2.7 percent increase over the previous year. This refund amount was part of the $4.7 trillion collected from 271.5 million tax returns in 2023.
Tax refunds are reimbursements made to taxpayers for any excess amount paid in taxes to the federal or state government. The IRS issues millions of dollars in refunds each year, either for overpaying amounts or as part of refundable tax credits such as the Earned Income Tax Credit, premium tax credit, or child tax credit.
The increase in refunds can be attributed to the additional funding provided by the Biden administration’s Inflation Reduction Act (IRA), which allocated $80 billion to the IRS. This funding has allowed the IRS to enhance its enforcement and collections efforts, particularly targeting high-wealth non-filers and taxpayers who underreport their tax liability through complex schemes.
Despite the increase in refunds, the IRS reported no increase in audits for taxpayers making under $400,000 per year. The agency also highlighted improvements in customer service, including answering more phone calls and increasing the number of filers eligible to file for free.
While the IRS introduced the Direct File pilot scheme for simple tax returns in 12 U.S. states, only a small percentage of eligible users opted to use the program. IRS Commissioner Danny Werfel emphasized the positive impact of the increased funding and resources on taxpayer service during the 2024 tax season.
Overall, the IRS’s efforts to modernize its technology and systems have led to significant improvements in taxpayer service and compliance, reflecting a positive trend in the agency’s operations.
