The Internal Revenue Service (IRS) has announced the amount issued in tax refunds for the 2023 fiscal year.
Of around $4.7 trillion collected from 271.5 million tax returns in 2023, the IRS paid $659 million in refunds; a 2.7 percent increase over the 2022 fiscal year. A tax refund is a reimbursement made to a taxpayer for any excess amount paid in taxes to the federal or state government.
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The IRS issues millions of dollars in refunds for overpaid tax to millions of Americans each year. Refunds can be issued for simply overpaying amounts or as part of refundable tax credits, such as the Earned Income Tax Credit, premium tax credit, or child tax credit.
In its latest news release issued on April 18, the IRS spoke of several successes throughout the previous tax year; the service has put this down to increased funding provided by the Biden administration's Inflation Reduction Act (IRA), which has allotted $80 billion in additional funding for the government agency.
"This once-in-a-generation funding opportunity provided by the IRA is an investment in the transformation of the IRS and an investment in the financial future of our nation," IRS Commissioner Danny Werfel wrote in the agency's annual Data Book introduction.
"The effects of this IRA funding—to hire more IRS employees and modernize the agency's technology and systems to provide better service to the American people—started showing up in the 2023 tax season. And that progress has accelerated into 2024."
The IRS has said the funds have allowed it to increase its enforcement and collections efforts on high-wealth non-filers and taxpayers who "underreport their tax liability through complex schemes."
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The IRS also said there was no increase in audits (an examination of an organization's or individual's accounts and financial information to ensure tax information is reported correctly) of tax returns for taxpayers making under $400,000 per year.
The government agency has also recently revealed improved customer services, including answering more than 1 million more phone calls than in the previous tax season and increasing the number of filers who are eligible to file for free. The Direct File pilot scheme opened this year, with filers in 12 U.S. states eligible to create and return simple tax returns directly with the IRS completely free of charge.
However, recent reporting by Newsweek shows that, of 19 million eligible users, only 0.3 percent opted to use the program. Newsweek has contacted the IRS for comment via email.
"Taxpayers continued to see major improvements from the IRS during the 2024 tax season," Werfel said. "A well-funded IRS is like night and day for taxpayers. With the help of more funding and added resources, service for taxpayers this filing season eclipsed levels seen during the past decade. This tax season meant real-world improvements for people looking for help, whether calling, visiting in-person or using IRS.gov."
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Aliss Higham is a Newsweek reporter based in Glasgow, Scotland. Her focus is reporting on issues across the U.S., including ... Read more
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