The IRS reported a significant return to taxpayers, disbursing around $659 million in refunds, marking a 2.7 percent increase in 2023 over 2022. This uptick in refunds comes against a backdrop of approximately $4.7 trillion in gross revenues collected by the agency, which underpins nearly 96% of federal government operations.
Despite the increase in refunds, there was a noticeable decline in gross tax revenues from $4.9 trillion in 2022, reflecting shifts in various tax categories. Business income taxes dipped to nearly $457 billion from $476 billion in 2022. Similarly, individual, estate, and trust income taxes went down as well, moving from just over $2.9 trillion to $2.6 trillion. However, there were gains in other areas such as employment taxes, estate and trust taxes, and excise and gift taxes, all of which saw year-over-year growth.
The IRS successfully processed more than 271.4 million tax returns and other forms during the year, including 163.1 million individual tax returns. Notably, more than 84 million individual tax returns were filed electronically by paid preparers, and nearly 2.9 million returns took advantage of the IRS Free File program.
Additionally, the Taxpayer Advocate Service handled 219,251 cases this year, with common issues including amended returns and pre-refund wage verification holds.
On the enforcement side, the IRS continued its scrutiny of tax filings, examining 0.44% of individual returns and 0.74% of corporate returns for the years 2013 through 2021. The agency took a particularly stringent examinations of individuals reporting more than $10 million in income, with an 8.7% audit rate.
In terms of collections, the IRS managed to secure more than $104.1 billion in unpaid assessments on filed returns that were due additional tax, netting about $68.3 billion after credit transfers. Additionally, the IRS conducted 2,584 criminal investigations focusing on a range of financial crimes, demonstrating its ongoing commitment to maintaining compliance and enforcing tax laws.