The IRS collected about $5.1 trillion in tax revenues for fiscal year 2024—which ran from Oct. 1, 2023, to Sept. 30, 2024, according to the Nov. 7 report from the agency. This is more than 8.5 percent higher than the roughly $4.7 trillion that the IRS received in fiscal year 2023. The biggest chunk of revenues in 2024 came from individual income taxes and tax withholdings, which accounted for $4.4 trillion.
This was followed by corporate income, excise, estate and gift, federal unemployment, and railroad retirement taxes. Receipts from individual and corporate income were higher this year.
The IRS processed 267 million tax returns and forms, and the average individual refund issued by the department was $3,143. The agency collected $98.7 billion through its enforcement efforts.
A majority of the collected amount was transferred to the General Fund of the Government, with the agency retaining $203 million and transferring $46 million to the Department of the Interior.
The GAO analyzed the IRS’s financial statements for fiscal years 2023 and 2024. While these statements “are fairly presented in all material respects,” the GAO stated that “internal controls could be improved.”
There were some problems with IRS systems used to account for federal taxes receivable and other unpaid assessment balances, the report noted. In addition, other control deficiencies led to errors in taxpayer accounts. These are issues that previously existed and continued during fiscal year 2024, according to the GAO.
“These control deficiencies affect IRS’s ability to produce reliable financial statements without using significant compensating procedures,” it stated.
“[The deficiencies] represent a continuing significant deficiency in internal control over financial reporting. Continued management attention is essential to fully addressing this significant deficiency.”
Expanded Enforcement
The IRS’s 2024 financial report also revealed the enforcement measures that it had implemented during this period.“[The IRS is] moving more swiftly to improve tax compliance in areas where the IRS did not have adequate resources,” it stated. “However, small businesses and households earning $400,000 or less will not see audit rates increase relative to historical levels.”
“This could impact many taxpayers who in reality make far less than $400,000. How would this affect an Idaho small-business owner whose gross sales generate more than $400,000, but after expenses and losses, takes home much less?” he asked.
The report noted that the IRS was considering subjecting married couples jointly who have a total positive income of $400,000 to the same audit risk as an individual earning this income. The TIGTA called it a “marriage penalty.”
Regarding enforcement efforts, the agency said it was using IRS funding to target high-income non-filers.
“In fiscal year 2024, the IRS ramped up efforts to pursue high-income and high-wealth individuals who have either not filed their taxes or failed to pay recognized tax debt, concentrating on taxpayers with more than $1 million in income and more than $250,000 in recognized tax debt,” the agency stated.
“The IRS opened examinations on 76 of the largest partnerships in the U.S., representing a cross-section of industries including hedge funds, real estate investment partnerships, publicly traded partnerships, large law firms, and other industries.”
The IRS sent more than 25,000 noncompliance letters to taxpayers in fiscal year 2024 suspected of tax evasion and who earned more than $1 million in income. In addition, more than 100,000 letters were sent to taxpayers with incomes between $400,000 and $1 million.
The Improving IRS Customer Service Act mandates the establishment of a dashboard informing taxpayers about backlogs facing the department and expected wait times.
The IRS will be required to expand electronic access to information and refunds. The agency also will have to inform individuals facing economic hardship about collection alternatives.
