Americans Paid $5 Trillion in Taxes to IRS Last Year Alone

The Internal Revenue Service (IRS) raked in a record-breaking $5 trillion in taxes last year.

The amount of taxes collected from Americans has soared under President Joe Biden, an analysis of IRS data shows.

Tax enforcement has also risen under Biden compared to President Donald Trump’s tenure.

According to the IRS’ newly released Data Book, the IRS collected a total of $4.9 trillion in taxes for the fiscal year 2022 (Oct. 1, 2021, to Sept. 30, 2022).

At the same time, the IRS issued nearly $642 billion in refunds last year, putting the net amount of taxes collected at around $4.26 trillion.

By comparison, in the fiscal year 2020, Trump’s final year in office, the IRS’ gross tax collections were $3.5 trillion.

With nearly $736 billion in refunds, that puts the net total taxes collected at around $2.76 trillion, or around 35 percent less than during Biden’s second year in office.

During Biden’s first year in office, the fiscal year 2021, the IRS’ gross tax collections amounted to $4.1 trillion.

When subtracting the $1.1 trillion in refunds, that put the net total at $3 trillion, or 8 percent higher than during Trump’s final year in the White House.

Tax enforcement, too, has accelerated under Biden.

Using the number of tax returns examined as a proxy for enforcement, there was a steady decline under Trump, with a recent low of around half a million in 2020.

That figure jumped to around 750,000 in 2021 and, in 2022, it remained at roughly the same level.

IRS Commissioner Danny Werfel said in an introduction to the 2022 Data Book that the agency’s commitment to maintaining a “visible, robust tax enforcement presence” is “strong.”

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“During FY 2022, we continued to develop and utilize innovative approaches to better understand, detect, and resolve potential noncompliance,” Werfel said, adding that this includes “leveraging new technology and data analytics.”

“Our comprehensive and coordinated enforcement strategy has shown success,” he added, presumably referring to the rise in the amount of tax collection and the boost in enforcement.

Werfel added that the IRS’ work to transform itself into a “stronger, more modern” organization continued in 2022 and that he’s “confident this journey will pay significant dividends over time.”

The agency recently received an $80 billion funding boost, with part of the funds going to hiring more staff, including in areas of tax enforcement.

This has fueled concerns about an increase in tax audit rates among lower and middle-income Americans, which the IRS has said repeatedly would not be the case.

The IRS recently released its strategic operating plan (pdf), in which it identified certain transactions as being at high risk of noncompliance and vowed to ramp up enforcement in some areas.

In a press release accompanying the release of the 2022 Data Book, the IRS said it would target its enforcement efforts at high-income and high-wealth individuals, complex partnerships, and big corporations.

“The IRS has no plans to increase the audit rate for households making less than $400,000,” the agency stated.

As the IRS has increased the amount of taxes it collects from Americans, however, the share of people saying that it’s “not at all acceptable” to cheat on income taxes has fallen sharply.

From 2021 to 2022, the share of Americans saying that it’s “not at all acceptable” to cheat on taxes fell from 88 percent to 84 percent, the lowest reading in six years.

READ MORE: IRS Chief Unveils Plan for Hiring Armed Agents

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By Nick R. Hamilton

Nick has a broad background in journalism, business, and technology. He covers news on cryptocurrency, traditional assets, and economic markets.

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