Tax season ends with no red flags for IRS

2017 tax season overview

The IRS processed more than 128 million returns and issued approximately 97 million refunds without hitting any major roadblocks this past tax season. As in the past, the majority of returns were e-filed. Likewise, most refunds were deposited electronically. Although the filing season has ended for most individuals, millions of taxpayers are on extension.

As always, there was a rush of last-minute filers. Just before the deadline, the IRS received roughly 135 million returns, which reflects a decrease of about 1 percent compared to the same time last year. Millions more will be filed by Oct. 16, 2017, when taxpayers extensions are due.

The IRS predicted that 12 million taxpayers would request extensions, which is not an extension of time to pay any tax due. Penalties and interest accrue on unfiled returns if taxes are not paid by April 18. There is no penalty for filing a late return after the tax deadline if the taxpayer receives a refund.

By the end of the filing season, the IRS reported it had issued some 97 million refunds. The average refund is $2,763, compared to $2,711 at this time last year.

Some early filers experienced delayed refunds this year. The Protecting Americans from Tax Hikes Act that passed in late 2015 took effect for the first time this filing season. The PATH Act generally required the IRS to hold refunds on earned income tax credit (EITC) and additional child tax credit (ACTC) returns until February 15. 

Tax-related identity theft always surges during the filing season. Although the IRS has not yet released any figures, the agency has claimed to have done a better job curbing cybercrime. The IRS has partnered with the tax preparation industry and tax professionals to enhance e-filing security and safeguards, many of which are behind the scenes.

One online tool was compromised by cybercriminals. The IRS took the Data Retrieval Tool (DRT) offline in March. The DRT is used by individuals completing the Free Application for Federal Student Aid (FAFSA). The IRS has reported that the DRT will remain offline until security features are improved.