While individual taxpayers are getting smaller refunds on average, the IRS says it is issuing more refunds than it did last year.
03/01/2023 2:15 P.M.
2.5 minute read
A new report from the IRS reveals it has sent millions more tax refunds to consumers this filing season compared to the same time last year.
According to new data, the IRS has received 36.9 million returns as of Feb. 17, 2023—up from the 35.9 million returns it had received by mid-February 2022.
A Money.com article noted:
- “Partially as a result of processing more returns, the IRS has refunded 11.8% more money to taxpayers—$87.2 billion for the first part of 2023 versus $78 billion in 2022.
- The number of refunds so far is 27.8 million, which is 25.9% higher than the 22.1 million the IRS reports for the same period a year ago.”
The IRS has been warning consumers that that this year’s tax season will be different than what we’ve seen in recent years due to the wind-down of pandemic stimulus payments.
ARM Industry Best Practices
Tax season is an opportunity to work with consumers who often want to use their tax refund to help pay past-due bills—a friendly reminder about how their tax refund, if available, can be used to pay down debts can be helpful.
Many debt collection agencies encourage their collectors to bring up tax refunds during conversations with consumers. Try asking, “Are you expecting a tax refund this year?” or “Have you thought about using your tax refund to pay this?”
Members can also take this time to inform clients of their best practices.
A report from TransUnion encourages collectors to make sure they are using accurate data: “To adhere to today’s regulations, you’re likely sending letters to persuade consumers to put their tax refund dollars toward debt. Direct mail is expensive, and if you’re working with outdated contact information, you can waste loads of money and time. It’s important to enhance your data before you begin your campaign. Consumers may have the extra cash, but that doesn’t mean they’re going to pay their debts. The fact is, some people are more likely to pay their debts with their refunds than others. Consider focusing your mailings on this group first.”
Here are a few additional tips for working with consumers during tax season:
- Train your team on key tax filing dates and deadlines, including areas where deadlines may be different due to natural disasters. For example, taxpayers in California and parts of Alabama and Georgia now have until Oct. 16, 2023, to file federal individual and business tax returns, according to the IRS.
- Include this information on a tax-time staff fact sheet, which can also list the income threshold for free electronic filing at IRS.gov.
- When speaking with consumers about tax refunds, keep communications positive and focus on finding solutions.
ACA offers education on tax season collection strategies, including a recent Hot Topic seminar hosted by Gordon Beck, president and COO at Valor Intelligent Processing. A recording of this webinar—available at no extra charge for All-Access Training Zone subscribers—is available on ACA’s website here.
Reminder: Our All-Access Training Zone includes all Core Curriculum and Hot Topic webinars, plus recordings. You can view our complete Education & Events calendar for more learning opportunities.
Remember, subscribe to ACA Daily and Member Alerts under your My ACA profile when logged in to acainternational.org to receive updates on the ACA Huddle.