We’ve compiled a few highlights from IRS-published data from 2022 and 2023, with preliminary figures available for 2024:- People filed about 85% of 163 million individual tax returns by the April 15 deadline in 2025. Analysts estimate that 7.5 million taxpayers who should file each year don’t — a 4.4% noncompliance rate.
- The IRS.gov website received almost 1 billion hits during 2024. By comparison, YouTube users watch a combined 35 billion hours of video each year. Maybe the IRS needs to move into more how-to videos.
- For filing year 2023, individual tax refunds totaled about $329 billion for an average refund of $3,138. It runs around $245 billion and $2,850, respectively, so far for 2024. It’s a reminder of just how much W-2 federal withholding the Treasury hoards for over a year.
- Of the 161 million individual returns filed for 2022, 804,830 return filers (half of 1%) showed an AGI of more than $1 million. Surprisingly, 34,630 filers had an AGI of more than $10 million.
- Of the AGI over $10 million group, 123 filers were aged 25 or younger. It’s astounding to think about earning that much income in our early to mid-20s.
- For 2022, the estimated total true tax liability for all income tax and employment tax types was around $4.6 trillion. Of that amount, taxpayers underreported an unrecoverable $606 billion — a 13% successful cheat rate.
A Sobering IRS OutlookThe IRS’s most recent “Budget in Brief” for fiscal year 2025 (published February 2024) reveals considerable challenges. The two excerpts below illustrate some of the organization’s struggles. - Funding Constraints, Customer Service Decline
“With no anticipated discretionary increases for inflationary requirements in FY 2024 and FY 2025, the IRS will be required to further extend its reliance on IRA [Inflation Reduction Act] resources to fund base needs. However, IRA resources are limited, and the IRS will likely use them entirely before the funding expires in FY 2031. “In addition, the authorizing language does not provide flexibility to realign the IRA funds across appropriations. This will have the most immediate impact on the Taxpayer Services (TS) appropriation, with IRA TS resources expected to run out completely during FY 2026. “Without additional funding or additional flexibility to realign between appropriations, telephone level of service (LOS) is expected to see a drastic decline in FY 2026 and fall even further in FY 2027. In this scenario, the vast majority of taxpayers would be unable to reach an IRS representative for assistance, including delays in return processing and answering correspondence.” - Aging Infrastructure
“The Percent of Aged Hardware is a measure that shows the quantity of IT hardware in operation past its useful life as a percentage of total hardware in use. The Percent of Aged Hardware increased from 7.1 percent at the end of FY 2022 to 19.9 percent in FY 2023. “Contributing to the increase in aged hardware were approximately 11,000 workstations which were originally purchased in FY 2018, and more than 2,000 routers and switches that were originally purchased in FY 2017. These all reached aged status simultaneously late in FY 2023. This represents an increase of more than 14,000 aged assets while total hardware decreased by over 4,000 during the fiscal year.” A Shift in PerspectiveWe often think negatively of the IRS as an organization, but consider the major problems they’re currently facing: - Noncompliance and underreporting are on the rise.
- Taxpayer support systems are in decline.
- Aging technology is widespread.
Plus, imagine how hard it must be to recruit people who can stand up to the best tax attorneys money can buy. It all adds up to a stressful work environment. Perhaps some empathy for IRS workers wouldn’t be misplaced? Engagement Letters in 2025We’re planning ahead for 2025 as we wrap up this year’s tax season at Seattle Accounting Professionals. We’re making one important change: Our firm will begin sending engagement letters for all tax services going forward. We designed this new approach to bring more clarity and ease to the process for everyone involved. These are a few key benefits: - Up-front clarity. You’ll know the cost of your tax preparation services in advance — no surprises.
- Better planning. It helps us ensure we have the right team in place to support you efficiently and effectively.
- Your spot, secured. We reserve space in our schedule each year for returning clients. But some clients move, simplify their finances or choose not to re-engage. As a result, we have to turn away others who need help. Engagement letters allow us to confirm who’s returning and better allocate our capacity.
Expect to receive your engagement letter well ahead of next year’s tax season. Sign early to secure your place on our calendar. If you have any questions when you receive your engagement letter, please call us at 206-420-7329 or email us. Thank you again for your continued trust — we truly appreciate the opportunity to work with you. | 
