The average tax refund increased 1.3 percent compared to last year, but the total value of those checks and the number of people receiving the payments continued to drop steadily in the first filing season under the new tax law.
The IRS released its weekly data Thursday after Treasury Secretary Steven Mnuchin told CNBC earlier that tax refunds were up 17 percent week-over-week without explaining how he arrived at that number and whether he was referring to the size of the average refund or the number of refunds issued.
The average refund actually increased 19 percent since last week.
Refunds averaged about $3,143 for the week ending Feb. 22, up from $3,103 a year prior, according to IRS data. The total value of all refunds decreased about 3.6 percent to $121.2 billion from about $125.7 billion at this time last year.
“Despite the higher refund average, we remind taxpayers that weekly filing season data is variable and will continue to fluctuate,” Treasury said in a statement. “We caution against drawing broad conclusions on refunds overall this early in the filing season.”
So far, nearly 38.6 million checks have been issued to taxpayers, compared to about 40.5 million at this point in 2018. Tax refunds have been a sore spot for Republicans who are facing blow-back from taxpayers who didn’t get the refund check they were expecting in the first filing season after the GOP tax law went into effect.
The law has struggled to break above 50 percent approval in polling since it passed more than a year ago.
“That basically gets us to the same level as last year,” Mnuchin told CNBC in London after touting the weekly jump. “I would just emphasize that even if people have perfectly done their withholding, people really should be focused on paying lower taxes and those lower taxes are money back into the economy.”
This week, the IRS released thousands of refunds that had been held at the IRS for additional anti-fraud screening. Checks with refundable tax credits — such as those for earned income, children or for health care — are delayed for extra scrutiny.
Mnuchin has tried to explain away data and anecdotal evidence that refunds over the first weeks of the tax filing season are lower.
Changes to the available deductions and withholding tables mean that ultimately fewer taxpayers will get refunds this year but may have seen more money in each paycheck.
The IRS estimates it will send out about 2.3 percent fewer refund checks this year. Instead, those who received a tax cut — about four in five taxpayers, according to the Urban-Brookings Tax Policy Center — received it in their paycheck last year because less was withheld. However, smaller or non-existent refunds have been frustrating to taxpayers who have become accustomed to receiving a check each filing season.
“You can tell people you gave them a tax cut,” said Christopher Faricy, a political science professor at Syracuse University. “But if they don’t believe it and their refunds are smaller, it’s a hard sell politically.”
Original Article Posted at : http://www.accountingtoday.com/articles/tax-refund-totals-down-from-last-year-mnuchin-touts-weekly-jump