There is little to be excited about when it came to this year’s tax season, and data from the Internal Revenue Service confirms what those in the accounts receivable management industry have been experiencing on a daily basis for the past few months — that if you were counting on a strong tax season to keep things moving along for the rest of the year, you are in for a rough few months.
As of April 15, 2023 — with still a few days left for consumers to file their 2022 income tax returns — the number of returns and the refunds those consumers received were both well down from last year’s levels. The average return this year was $2,840, down more than 8% from $3,103 a year ago. Even the total number of returns that had been received by the IRS was lower than last year. The number of returns received as of April 15 was 4.3% less than the number received on the same date last year.
Every data point tracked by the IRS with respect to filing season statistics was down on a year-over-year basis, many by more than double-digits. The total amount refunded, for example, was 11% lower than last year.
A rough income tax season, coming in front of a year where many expect the economy to head into a recession, is not something that bodes well for the ARM industry. Anecdotally, a number of companies said that while February was really rough, things did start to pick back up in March with respect to revenue, so perhaps there is still a silver lining to this dark cloud.