With only one month into the tax filing season, the Internal Revenue Service (IRS) has already issued tax refunds to more than 40 million people worth a total of about $125 billion, not bad for a tax-collecting agency that has experienced budget cuts and limited tax examiners.
The IRS said in a news release Thursday that the average tax refund is $3,120, as of Feb. 20. It tends to be higher earlier in the tax filing season because those who expect to receive a refund try to file as early as they can. It should be noted, though, that hackers file as early as they can, too.
According to the press release, the IRS has processed approximately 50 million tax returns, which is about one-third of what the federal agency expects to receive this year. Also, 83 percent of those returns have resulted in a refund for taxpayers, and 92 percent of those have been quickly deposited into their taxpayer accounts.
In the announcement, the IRS recommended taxpayers to use the various online tools and resources on its website to help explore their tax return options. The tax return deadline is Apr. 15, but it suggests to file it as soon as possible because there are longer wait times on the IRS phone lines and the amount of staff members available have been reduced.
The IRS has been in the news in the past week because it was reported that the audit rate is at a multi-year low. Last year, the tax audit rate dipped to 0.86 percent, the lowest since 2005, and audited around 1.2 million people. The reason for the record-low audit rates is because the lack of tax examining agents, according to IRS Commissioner John Koskinen, who is seeking out a budget increase in Congress shortly.
Koskinen believes if audit rates are too low then it could undermine the federal tax code and reduce Americans’ faith in the system that people are not paying their fair share.
“At this point, we do have a tax compliance ethos and people pay their fair share,” said Koskinen. “If you’re in Des Moines and you’re writing that check, and you feel that maybe your neighbor down the street isn’t, or is getting away with something, that’s a problem.”
