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IRS Newswire April 14, 2023

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Issue Number:? ??IR-2023-82

Inside This Issue


IRS releases fiscal year 2022 Data Book describing agency?s activities

WASHINGTON ?The Internal Revenue Service today issued its annual Data Book detailing the agency?s activities during fiscal year 2022 (Oct. 1, 2021 ? Sept. 30, 2022), including revenue collected and tax returns processed.

In many areas, the statistics in the 2022 Data Book reflect the impact that past resource constraints had on the agency?s ability to provide adequate taxpayer service and address compliance issues, including audits of higher income taxpayers, partnerships and large corporations.

For FY 2022, the gross collections of the agency totaled more than $4.9 trillion, or about 96% of all government funding. When compared against the cost to fund the IRS, the ratio of agency costs to revenue was 29 cents per hundred dollars collected for 2022, the lowest cost to taxpayers in the history of the agency.

The IRS issued $50.9 billion in payments to taxpayers during FY 2022 as a result of legislation passed by Congress in response to the COVID-19 pandemic. Of this, $3.7 billion were classified as Economic Impact Payments and $47.3 billion were considered Advance Child Tax Credits.

The Comprehensive Taxpayer Attitude Survey has provided valuable insight to the agency for more than two decades, and during 2022 it was expanded to contact hard-to-reach populations. For 2022, the survey results showed improvements in taxpayer interactions with IRS. After a dip in satisfaction from 2019 to 2021, there was a significant increase in satisfaction in 2022, rising to a score of 78%, up from 75% in 2021.

Returns processed

The IRS processed more than 262.8 million federal tax returns during FY 2022, of which 160.6 million were the tax returns of individuals, and of that total, 150.6 million were e-filed, or almost 94% of all individual tax returns.

Taxpayer assistance

During 2022, the IRS assisted more than 71.3 million taxpayers through correspondence, its enterprise-wide telephone helplines or at Taxpayer Assistance Centers. Additionally, the agency provided self-assistance to taxpayers through nearly 1.1 billion visits to IRS.gov, including 447.7 million inquiries to the ?Where?s My Refund?? application, and almost 14.1 million active IRS2GO mobile app users. Taxpayers downloaded close to 453.9 million files (such as tax forms and instruction documents) from IRS.gov.??The IRS issued 6.1 million Identity Protection Personal Identification Numbers to taxpayers, an increase of 27% over the prior year; of these, upwards of 1.3 million were issued through IRS.gov. Through its Volunteer Income Tax Assistance and Tax Counseling for the Elderly programs, the agency was involved in preparing more than 2.2 million returns with the aid of 57,420 volunteers.

Examination

For the past decade, the IRS has seen an increase in the number of returns filed paired with a decrease in resources available for examinations particularly for the most complex tax returns of high-income and high-wealth individuals, large corporations, and complex partnerships. Going forward, as the IRS moves to implement the Strategic Operating Plan released earlier this month, the agency is focused on pursuing high-income and high-wealth individuals, complex partnerships and large corporations that are not paying the taxes they owe. As a result, the IRS has no plans to increase the audit rate for households making less than $400,000.

The 2018 information is the most recent year we have final audit rate data because it is the most recent tax year for which the statutory period has closed, meaning in most cases no new audits will be started and the audit coverage rates should be final.

Typically, audit rates for higher-income categories increase over time as new audits are opened during the statutory period. This means the audit numbers for higher-income taxpayers listed in the 2022 Data Book Table 17 will increase over time for tax years within the statutory period; the final exam rates for these taxpayers will be significantly higher in future years.

The examination coverage rates presented in the annual IRS Data Book, represent a ?snapshot? as of the end of each fiscal year, but the data will continue to change as open examinations close and new ones are opened.

While IRS accepts most returns as filed, some are selected for examination or audit. In FY 2022, the IRS closed 708,309 tax return audits, which resulted in nearly $30.2 billion in recommended additional tax.

Other IRS functions

In addition to the work described above, overall, the IRS Data Book for FY 2022 comprises 33 tables describing the full variety of IRS activities from returns processed, revenue collected and refunds issued to the number of examinations conducted and the amount of additional tax recommended, as well as budget and personnel information. The current issue also provides an additional Appendix table about the types and amount of COVID-19 employer credits claimed and processed through the end of FY 2022 and those processed in prior fiscal years. The Data Book provides point-in-time estimates of IRS activities as of September 2022.

IRS Statement on Data Book Examination Coverage Rates in the 2022 Data Book.

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