As of February 3, the IRS had issued eight million refunds totaling nearly $15.7 billion, the agency reported.
The IRS also received a significantly higher number of returns for this period as compared to last year, with about 18.9 million returns received as compared to 16.7 million in 2022.
However, the average refund amount was $1,963, down from $2,201 last year for the same period, marking a 10.8% decline. Although the IRS previously warned that returns might be lower this year compared to last, the agency still has millions of returns to process before the April 18 deadline.
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“It’s tough to draw too much of a conclusion over a relatively short period of time,” Eric Bronnenkant, head of tax at digital investment advisor Betterment, told CNBC.
Either way, the IRS expects to be more efficient this year compared to last as it begins to deploy its nearly $80 billion in funding from the Inflation Reduction Act. The agency kicked off tax season by hiring 5,000 new workers for its customer service team and implementing new technology, CNBC reported.
Back in August, the Inflation Reduction Act allocated $79.6 billion in funding to the IRS over 10 years with intentions to improve customer service and technology and clear any tax return backlog. Given the increase of 29.1% in returns already processed compared to this time last year, the new initiatives appear to be leading to a more efficient tax season for all.
