2023 tax season is going more smoothly than anticipated; IRS increases number of returns processed

As of February 10, the IRS had processed just over 26.6 million tax returns, compared to 23.4 million over the same period in 2022, an increase of 13.6% (filing season statistics for the week ending February 10, 2023).

The number of returns e-filed has increased

Over 94% of the 28.8 million returns received as of February 10 were filed electronically, which is one important reason for the quicker return processing. E-filed return refunds are usually issued within three weeks, while complete and accurate paper returns due a refund are typically issued within 6-8 weeks.  

For tax pros, e-file has increased by over 11% YOY compared to the same period in 2022. For taxpayers, that number increased by 3.4%.

The number of refunds sent is up, while the average refund amount is down

The agency sent over 13 million tax refunds, 48.4% more than the 8.9 million refunds it sent out last year.  

However, the average amount of refunds received by taxpayers was $1,997 for tax returns processed through February 10, compared to $2,323 during the same period in 2022. That is a reduction of 14% for the same period last year.  

Reasons for the lower average refund amount include the fact that many credits returned to pre-pandemic amounts. These include the Child Tax Credit (CTC), Earned Income Tax Credit (EITC), and Child and Dependent Care Credit.  

In addition, the elimination of the above-the-line charitable deduction could further reduce the refunds taxpayers receive.

Fewer taxpayers have visited the IRS website so far this tax season

The IRS saw a 13.4% reduction in traffic compared to last year. Many believe a key reason is that tax pros and taxpayers are finding it easier to get through by phone to IRS representatives to answer their questions.  

An IRS spokesperson told me, "so far this tax season, we have seen a significant increase in calls to the Practitioner Priority hotline and taxpayer phone line being answered by IRS customer service representatives. IRS customer service reps have answered 89% of tax pros' and taxpayers' calls, and 93% have been answered when you count automated responses (chatbots)."  

Last year, during the same timeframe, the IRS was able to answer only 13% of calls. 

Caution—it's still early 

As we know, it's still early in the tax season, but this is certainly a very good start. The IRS expects approximately 168 million individual tax returns to be filed this season. Much work remains to be done.