Web Scraping the IRS: Smaller tax refund in 2019?

Check out the Tableau Dashboard here.

The “hype” around a lower 2019 tax returns

Surely no one is hyped up about a lower tax return, but there are more news articles popping up each day (Times, CBS) writing about how the tax refund is smaller this year. But is that the whole picture?

So let’s dive in and see …

As of when I was writing this post, only the first two weeks (2/1/19 and 2/8/19) of data had been published. Comparing 2019 against 2018, there is a 23.15% ($6.68 Billion) decrease in total refund ($), and average refund decrease by 8.73% ($2135.31 to $1947.86).

But … less people filed this year compared to last year - 2.12 Million (-6.86%) less returns were received and 3.05 Million (-10.16%) less returns were processed compared to 2018!


Live Dashboard (Updated):


Observations:

It’s too early to tell whether, on average, Americans will have a smaller tax refund this year just by looking at the data.

For example, if we compare 2018 against 2017, looking at first two weeks only - we would have observed that there’s a 2.18% increase in average refund. But at the end of the filing season, we find that 2018 and 2017’s tax refund is very similar (+0.14%).

So what assumptions were faulty that led us to conclude tax refund will be smaller this year?

  • The volume of tax return filed in the first two week in 2019 is comparable to 2018’s. (Which we checked to be untrue)
  • The same people will file taxes around the same time as last year & on average their income/tax status did not change significantly. (Don’t have the data to verify)

Now I’m not saying that 2019 tax returns aren’t going to be smaller…

I’m just saying it’s too early to tell by just the data.

By no means I’m a tax expert, but some articles suggests different reasons for a smaller tax return. According to Times, “[u]nder the new law, many people saw less money taken out of their paychecks, which has led to smaller tax refunds.” CBS writes that it could be due to that the new tax laws “eliminated personal exemptions, increased child credits, limited popular deductions… “


Toggle on the “View” Parameter on the top left on the dashboard.

Americans - Are we early birds or procrastinators?

The bottom graph in “Historical” dashboard is a view on the Tax Refund Amount ($) and the # of Tax Refund received by the IRS over time from 2017 to 2019.

  • It’s pretty evenly split, there are the early birds, and there are also the procrastinators.
    • In 2018, 1.8302 millions filed on the first week, while 1.8339 millions filed on the closing week. That’s only a 0.2% difference!
    • Comparing first 6 weeks (2/2/18 - 3/15/18) vs second 6 weeks (3/16/18 - 4/25/2018), there are 2.049 million Americans that file in the first 6 weeks versus the 2nd 6 weeks.
  • Interesting:
    • 39.59% of Americans filed their taxes within the first 5 weeks!
    • 22.30% of Tax Refund money returned to American’s bank accounts on the 3rd week of tax season (2/16/2018)
      • And 45.49% of all tax refund $ returns to American by the 5th week.

Some implications for brands and businesses:

  • If your product is to be consumed for the tax preparation season, start early!
  • If you have marketing campaigns to target Americans’ tax refund money to splurge on your product, start early!

How many Americans actually get a tax refund?

Year Refunds Received by IRS Refunds Processed Refunds Sent Out % Refunded
2018 154,444,000 154,058,000 111,911,000 72.46%
2017 152,235,000 151,916,000 111,873,000 73.49%

In 2017 and 2018, roughly 72-73% of Americans received a tax refund. Though interestingly, it’s curious why some amount of tax returns don’t get processed each year.

So what’s next?:

  • Wait for IRS to publish more data. I setup a cronjob for the python script to run weekly to keep the dashboard refreshed.

Stay tuned for more …

  • How I scraped the IRS with Beautiful Soup in Python.
  • Is 2019 tax refund really smaller? (April Edition)

Thoughts, comments?:

Reach out on LinkedIn or email.