As American taxpayers prepare for the end of the year and the beginning of a new tax season, the government agency that oversees the IRS has released an overview of last yera’s tax filing season.
The Treasury Inspector General for Tax Administration says that 140.9 million taxpayers filed their income tax returns between Jan. 29 and May 4, 2018. Of these, 89.2% were filed electronically.
The IRS issued more than $282 billion in refunds to 101 million taxpayers during that period. The average refund was nearly $2,600.
According to TIGTA, the IRS began accepting and processing individual tax returns on January 29, 2018. However, on February 9, 2018, subsequent to the start of the filing season, Congress enacted the Bipartisan Budget Act of 2018 that retroactively extended a number of individual tax provisions for Tax Year 2017 and modified disaster relief provisions.
As of May 3, 2018, the IRS processed 4.9 million tax returns that reported nearly $27 billion in Premium Tax Credits either received in advance or claimed at the time of filing. A total of $3.7 billion received in Advance Premium Tax Credits was in excess of the amount of Premium Tax Credits that taxpayers were entitled to, with a total of $1 billion not required to be repaid.
Although the IRS informs taxpayers of the requirement to provide the educational institution Employer Identification Number (EIN), the IRS has yet to implement processes to identify and disallow American Opportunity Tax Credit claims at the time tax returns are filed for which the required EIN is not provided. TIGTA identified 234,053 tax returns that were filed without an educational institution EIN for which the taxpayers received approximately $209 million in the refundable American Opportunity Tax Credit.
The IRS developed processes to implement the key tax provisions included in the Disaster Relief Act and the Tax Cuts and Jobs Act. However, not all taxpayers received the benefit intended from the disaster relief provision. TIGTA identified 1,128 tax returns claiming the Earned Income Tax Credit using Tax Year 2016 earned income that the IRS incorrectly adjusted based on the taxpayers’ Tax Year 2017 earned income. The IRS agreed that these tax returns were worked incorrectly.
TIGTA analyzed approximately 3.8 million confirmed identity theft victim tax accounts and found that 37,555 (1 percent) were Individual Taxpayer Identification Number (ITIN) accounts. The IRS currently does not issue Identity Protection Personal Identification Numbers (IP PINs) to ITIN account holders; therefore, the 37,555 tax accounts will not receive the same identity theft protection measures as Social Security Number holders.