The IRS has released data showing that taxpayers are not rushing to file their returns as the tax season reaches its midpoint. Figures from the fifth week of the filing season, ending February 28, 2025, reveal a 3.0% drop in the number of tax returns received compared to 2024, and nearly 10% down from 2023. The IRS initially suggested these numbers would level out as the April deadline approached, but recent weeks have seen no such reassurances.
The administrative turnover at the IRS may be contributing to this situation, with the agency now under its third Commissioner in as many months. A Trump Administration hiring freeze has also led to widespread cuts within the agency, further complicating operations. Additional factors are in play, including reports about the elimination of Direct File (which remains operational) and concerns about the privacy of financial data.
Some taxpayers are even under the impression that there will be no consequences for failing to file or pay. E-filed returns have also seen a decrease, with the IRS receiving 51,209,000 e-filed returns as of February 28, 2025, a 3.0% decline from the previous year.
Taxpayer filing slows, refund amounts rise
While just over half of these returns were self-prepared, an increasing number were filed with help from tax professionals. Visits to IRS.gov have dropped significantly by 43.2% compared to 2024, with only 191,685,000 visits by February 28, 2025. This decline might be due to infrequent updates on the site and concerns over data security.
In contrast, the number of tax refunds has seen an increase. By February 28, 2025, the IRS had issued 36,902,000 tax refunds, compared to 36,288,000 in the same period last year. The average tax refund has also increased by 6.3%, standing at $3,382 per taxpayer compared to $3,182 in 2024.
The IRS anticipates that over 140 million individual tax returns for the tax year 2024 will be filed before the federal deadline of Tuesday, April 15. As the season progresses, more updates are expected.
