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Had to Be A Monday: Tax Day 2024

Posted: Apr 15, 2024

On Monday, more than 160 million taxpayers will partake in the annual ritual of filing their individual taxes with the Internal Revenue Service (IRS). While certainly not every filer will have a taxable return, on the order of 19 million taxpayers will request extensions, and most taxpayers will have already filed, April 15 holds special meaning for taxpayers. 

For most Americans, tax-filing is a rare example of direct interaction with a federal agency. To be sure, federal policy influences all manner of economic activity, but the agencies that execute federal laws and regulations are rarely so public-facing in their administration. There are exceptions, of course. The National Park Service and the Postal Service, for example, are customer-oriented in their outlook. Americans’ interaction with the IRS is a somewhat different experience. 

It is perhaps no surprise that the IRS is the least popular federal agency in the country, whereas the Park Service and the Postal Service are the most popular. Americans are not enamored of taxation, but with respect to tax filing, most filers get money back. 

According to the most recent filing season estimates, over 90 million taxpayers have already filed their tax returns. Among these filers, nearly 61 million received tax refunds. Thus, for most taxpayers, filing taxes has a short-term payoff, amounting to an average of about $3,000. Nevertheless, taxpayers hate the IRS, and some statistics shed light on the reasons why.

Less than 10 percent of taxpayers file paper returns, with the vast majority of taxpayers filing electronically. For good reason, taxpayers have largely abandoned paper returns. The IRS acknowledged it had a backlog of 17 million paper returns in 2021, which it has largely whittled down. But electronic filing is not a panacea. Of the 150.9 million tax returns filed electronically in 2023, more than 19 million forms 1040 were rejected. Good luck to these 19 million Americans when it comes to rectifying their situation, as the IRS doesn’t exactly have a stellar customer support record.

The IRS made a concerted effort to improve its responsiveness to telephone calls, and by the agency’s own metrics, it achieved a “level of service” of 85 percent. But as the IRS’s internal watchdog, the Taxpayer Advocate Service (TAS) noted, this does not equate to the percentage of calls answered by the service. Rather, this metric excludes certain unanswered or misdirected calls, among other unfavorable interactions: The actual statistics are significantly less impressive than 85 percent – only 29 percent of the nearly 93 million calls the agency received over the year were answered by an IRS employee.

This is the case despite the fact that the agency prioritized answering phones at the expense of processing returns. The TAS observed that staff qualified to process returns were, “simply sitting around waiting for the phone to ring.” 

The Inflation Reduction Act provided nearly $80 billion in new funding for the IRS, but most of that funding was devoted to enforcement. Only a relatively scant $3 billion was devoted to “taxpayer services.” Given the reputation and track record of the IRS, it’s no wonder why Americans dread Tax Day.