Teaching Tax Flow: The Podcast

Episode 195 of the "Teaching Tax Flow" podcast, Chris and John discuss the IRS Data Book for the fiscal year 2025. They break down the comprehensive data report to highlight essential insights into IRS collections, refunds, and the broader tax landscape. This episode is the first of a two-part series, with this particular installment zeroing in on the top administrative observations.

The discussion kicks off with an analysis of the IRS's unique role as an 'involuntary business partner,' emphasizing the wealth of information available in the IRS's annual report — akin to a playbook for taxpayers and businesses. The hosts highlight critical shifts in tax collections and refunds, illustrating how individual tax payments have increased, even amidst the lowest tax rate

Full 2025 IRS Databook
https://www.irs.gov/pub/irs-pdf/p55b.pdf

⸻

EPISODE SPONSOR
Wealth Builders Mortgage Group
Your trusted mortgage partner for investors and entrepreneurs.
👉 https://www.wealthbuildersmortgagegroup.com

⸻

👉 Spotify https://bit.ly/3KdmtJL
👉 Apple Podcasts https://apple.co/3ZkyEtX
👉 Amazon https://amzn.to/4qmdqa5
👉 iHeart https://bit.ly/iheart-TTF
  • (00:00) - Exploring IRS Data Book Insights and Administrative Observations
  • (04:45) - Increased Tax Collections and Refunds Amid Low Tax Rates
  • (07:09) - The Rise of E-Filing and Its Impact on Tax Processes
  • (11:58) - Significant Shifts in IRS Tax Refunds and Collections
  • (18:01) - Understanding Excise Taxes and Their Impact on Daily Life
  • (20:36) - Educational Podcast Disclaimer and Financial Advisory Information

Creators and Guests

Host
Chris Picciurro
Founder, Teaching Tax Flow
Host
John Tripolsky
VP of Marketing, Teaching Tax Flow

What is Teaching Tax Flow: The Podcast?

Welcome to “Teaching Tax Flow: The Podcast”, the show that’s all about demystifying taxes and helping you keep more of your hard-earned income in your pocket.

Hosted by tax experts from the Teaching Tax Flow team, this unfiltered (but clean) podcast is designed to empower you with the knowledge and tools you need to confidently navigate the world of taxes. We’ll cover everything from understanding tax laws and regulations to maximizing deductions and credits.

In each episode, we’ll break down a specific tax-related topic in a clear and accessible way, providing practical tips and strategies you can use to optimize your tax situation. We’ll also answer listener questions, share the mic with amazing guests, and share real-world examples to help illustrate key concepts.

Whether you’re a freelancer, small business owner, real estate investor, or just looking to understand your taxes better, this podcast is for you. So tune in, take notes, and start building your confidence in taxes today.

Produced and hosted by Teaching Tax Flow.
www.TeachingTaxFlow.com

John Tripolsky:

Hey everybody, welcome back to the Teaching Tax Flow Podcast episode 195. As promised, we are diving back into the IRS, that Internal Revenue Service Data Book. This year it's for fiscal year 2025, and of course there's more stuff packed in this thing than we could ever put in one single episode, so we're breaking it into two. The first section here, we are gonna look at our top, won't tell you how many, I'll let my co host tell you that, administrative observations. So if that doesn't perk your ears, you will definitely take something from this one.

John Tripolsky:

And by the way, Chris, I think they've been doing this data book for almost twenty years. I think it was 2007 when the IRS first started putting this out. I could be wrong, but this thing is jam packed with information. Really, it's public information. So as as always, man, let's dive into this one.

John Tripolsky:

I'm always excited. I love these.

Chris Picciurro, CPA:

We talk about that one of the three laws of teaching tax flow is that your that tax agencies are your involuntary business partner. So to understand your involuntary business partner, the IRS issues an annual report every year in the summer based on their fiscal year. So their fiscal year starts on October 1 and goes to September 30. So this is a report that runs through their fiscal year 09/30/2025. And like like you said, you know, we don't necessarily look at the IRS as our enemy.

Chris Picciurro, CPA:

They're not our ally, and that's they detailed a lot in our defeating taxes book. They're our involuntary business partner. Now many listeners and subscribers do consider the IRS the maybe their their their enemy or Darth Vader or whatever we wanna call it. Regardless, they are the ones that administer our tax code. So by not diving in to the public report that they send out, we would be foolish.

Chris Picciurro, CPA:

Now I don't expect people are going to spend, you know, $30.35 hours in this data book. That's why we were gonna do this podcast. Last year, we did one episode on it. Now we're gonna do two episodes. We're gonna talk about our seven administrative observations from the data book, really looking at the returns filed, taxes collected, and refunds issued.

Chris Picciurro, CPA:

The next episode we do here is we're gonna talk about compliance and enforcement. So they go hand in hand and, yeah, I we put together the top seven observations. So why don't we dive in? Because, again, anyone that's played sports I mean, can you imagine being a football team and already having the playbook for the other team? So this is like scouting, right?

Chris Picciurro, CPA:

This is your advanced scouting or can you imagine going to a job interview? Wouldn't it be nice to know all the people that are interviewing you, who will be there, and what questions they're going to ask you before you even walked in the door? And that's what we have in front of us. So we're happy to give that to the teaching tax flow community, and, I'm ready to dive in.

John Tripolsky:

Yeah. And with this too, Chris, so so we're looking at the data book, not the publication or the pub is sometimes it's called. Right? Data book, we're looking at basically their their metrics, their reporting on activities where the publication is what? Like, I think it's, 7,000 pages.

John Tripolsky:

It's it's incredibly huge, and that's the rules, regs, laws, whatever you wanna call them within there. Right? The guardrails.

Chris Picciurro, CPA:

Right. There are tons of publications in the IRS code. We are looking at think about this as this is the IRS's annual report. If they were a publicly traded corporation, they would have an annual report that that they're talking heads in the investment world look at and analyze. The IRS is not well, some might consider it a a a nonprofit.

Chris Picciurro, CPA:

Some of them might be losing money and gaining money, but but regardless, this is their annual report that they're obligated to give us. And yeah. So let's jump in. Let's dive below under the hood here on these administrative observations. And you're right.

Chris Picciurro, CPA:

This is separate this is a report about their operations from the last fiscal year. Now many people wonder why our estimated payments are due at certain times, and a lot of that's driven by the fiscal federal fiscal calendar. So but yeah. So let's so let's jump in. So the first observation is that the IRS collected more money, but refund refunds grew faster.

Chris Picciurro, CPA:

Now we've had a lot of content in teaching tax law with the one big beautiful bill act. We anticipated refunds would be larger this year because of the, you know, because of the these new temporary tax deductions. Again, now now the lot of lot of these refunds occurred in 2025, so it really weren't affected too much by the one big beautiful bill act. However, with the higher standard deduction, maybe there are more refunds. But, the IRS collected $5,134,000,000,000 of gross tax with the team.

Chris Picciurro, CPA:

That was up from 5.1 the previous year. So that's a $2,130,000,000 increase in tax. Now, that's funny. Right? Because we know right now that we are in the lowest tax rate era ever.

Chris Picciurro, CPA:

However, the IRS collected more tax. That seems weird. Why would that be? My observation was is this. There are a lot of people out there that understand we are, and I think you've you've quoted me on this that I said is the golden era tax at some point.

Chris Picciurro, CPA:

Like, we are in a very low marginal tax rate environment. So for people that have assets in pretax accounts, they're realizing maybe I should pay tax on this now, lock in the tax at today's rates, and that's that's what's happening in my opinion. So refunds did rise. Also, this is crazy. Refunds rose from 553,000,000,000 to 639,000,000,000.

Chris Picciurro, CPA:

So refunds are higher, but taxes collected are higher. Very interesting. A lot of movement. Absolutely. The second observation.

Chris Picciurro, CPA:

The IRS processed 271,500,000 tax returns in 2025, $271,000,000. That was up from February. So almost 5,000,000 more tax returns were processed, which is really interesting. Now does that mean that people are creating more entities? Does that mean we have more taxpayers?

Chris Picciurro, CPA:

You know, obviously, you know, the more tax was collected, who knows? It's just interesting that we have more filings. Does that mean that the the the more people are are maybe our country is getting older and they're having to take required minimum distributions. But anyway, that's a decent amount more taxes to be pro taxes to be processed, and virus isn't necessarily growing their their work pool either. So more work for the probably the same amount, if not less, amount of employment.

John Tripolsky:

And that's almost exactly what I was gonna say. It's right. I I mean, I hate to say, hey. Let's let's give them a little bit of grace here as a as an operation. Right?

John Tripolsky:

But imagine if e filing wasn't around yet. Like, they're literally sliding papers through doing these. I mean, obviously, technology now is kind of king in that world, but that explains a little bit why the average taxpayer could just pick up the phone and somebody answer in three rings from the IRS with a question. Right? So why you say that is adding a little color to this is, I think, now leaning on a tax professional more than ever is is really the liaison, if you will, to getting things done correctly.

John Tripolsky:

Right?

Chris Picciurro, CPA:

Right. And you nailed the eye, and then we're into number three, but the IRS wants you to electronically file. So for the fiscal year 2025, which was went through 09/30/2025, more than 224,000,000 returns in documents were electronically filed. So that makes that represents almost 83% of returns being electronically filed. That is an exorbitant amount.

Ad Read:

This episode is sponsored by Wealth Builders Mortgage Group, powered by Movement Mortgage, one of the top mortgage teams in the nation and a powerhouse in the real estate investing world. With over $1,100,000,000 in closed mortgage volume and more than 3,000 investor deals under their belt. They don't just talk the talk, they walk it. Their team specializes in helping short term and long term rental investors scale smart with customized lending strategies. They offer all STR loan products, including second home, investment, non QM, bank statement, asset based, and HELOCs.

Ad Read:

They also offer all primary home loan products, too. Whether you're just starting out or expanding an existing portfolio, their unique path of 10 strategy is designed to help you move from a nine to five job to financial independence. If you're looking for a lending partner who truly understands the investor mindset, visit wealthbuildersmortgagegroup.com and start building your roadmap today.

Chris Picciurro, CPA:

And that's across the board. Right? When we talk about individual tax returns, so those are the October. The the e file rate was even higher. 93.7 returns were electronically filed, up from 93.3 in the previous year.

Chris Picciurro, CPA:

So almost 90 almost 19 out of every 20 returns, individual returns have been are electronically filed. Now once in a great while, there might be a form or something we're not allowed to electronically file. There might be reasons to not electronically file. But in general, electronically filing, if you're getting a refund, it expedites it. It's much more secure, you know, instead of mailing documents around with your Social Security number and sensitive financial information.

John Tripolsky:

The postal service definitely takes a hit these days, but, you know, they'll find other ways.

Chris Picciurro, CPA:

Well, that's interesting. Right? Think about the postal the volume, the co in in many ways. You know, I feel like we still get junk mail. Right.

Chris Picciurro, CPA:

But newspaper decline. I mean, it's just a this is an indication of the IRS. So the IRS was going to say they're gonna give themselves a high five for that. That's a that's a statistic. That's a win.

Chris Picciurro, CPA:

And I think it's a win for everybody. You know, I think electronically filing is the right way to go, and we have lots of clients. I mean, in our private CPA package, we electronically file all the returns that we can. And then sometimes you actually can include a an attachment. Sometimes IRS will say, we really, let's say, they donated a non cash item that needs of that that we have to attach something verifying that that the donation is legitimate.

Chris Picciurro, CPA:

So so yeah. So some now you can you we can we can attach documents to the file. So that's pretty bad.

John Tripolsky:

I actually never knew that. I never knew you could do that. It would make sense, right? Because it's if not, you're just taking somebody's word for it, and then if they dispute it or some form, you've you can't say, oh, well, you know, you didn't let me send you anything. So tough.

John Tripolsky:

Right. Now my dog ate it or something. Makes sense.

Chris Picciurro, CPA:

So the the next number four observation. This is kinda crazy. Fewer people received individual refunds, but the average refund was larger. So the IRS issued about 117,000,000 individual tax refunds last year, up down from about a 117. So, even though the and but in the so even though the amount of people getting a refund was less, the gross amount of dollars refunded was much higher.

Chris Picciurro, CPA:

So, $491,000,000,000 was refunded to tax individual taxpayers the previous year. It was 516,000,000,000 this year. So that means the average refund increased from $4,171 to $44.17. That's a pretty significant increase. I mean, that's a.

John Tripolsky:

Right.

Chris Picciurro, CPA:

Almost a 10% increase in average taxpayer refund.

John Tripolsky:

And you think too, like, even even that, you know, you're you're roughly, you know, $300, right? Under $300 in difference. It might not sound like a lot but again, that's the average over that many million of them. Like, that's, I mean, not that many million refunds but that many, you know, returns process. That's huge.

John Tripolsky:

That is massive.

Chris Picciurro, CPA:

It's not

John Tripolsky:

just a couple bucks.

Chris Picciurro, CPA:

I anticipate this amount is higher next year. Why? Because of that new schedule one a. We do have a full episode on that. We have content on the teaching tax sale YouTube channel about those four new temporary deductions, the no tax on tips, no tax on overtime, senior deduction, and new vehicle interest deduction.

Chris Picciurro, CPA:

Though those those are going I feel we're gonna have larger refunds and more refunds a year from right now when we record this. God willing, we record this episode for the 2026 data book. I was shocked by that the the that that number. Because when yeah. When John, when you're talking about billion or millions of people, to go up almost 9% of the refund total is a lot.

John Tripolsky:

That's huge.

Chris Picciurro, CPA:

And I didn't think the average refund was that high. Didn't I think it was almost $5,000.

John Tripolsky:

If I had to guess, I would have said almost maybe sub 2,000.

Chris Picciurro, CPA:

Right. That's true. So number five out of the seven, business income tax collection collections dropped sharply. So business income tax collections were 565,000,000,000 in '20 from fiscal year twenty four, down to 486,000,000,000. That's a almost an $80,000,000,000 decrease in business income tax collections.

Chris Picciurro, CPA:

Now does that mean that less people are c corporations and we have more flow through entities like, you know, partnerships, sole proprietors, or s corps? You know, it's it's just it's just interesting. Right? It it means that with the one big beautiful bill act and the tax cuts and jobs act, you know and and remember at this point too, the data collected here comes from the fiscal year ended 09/30/2025. The vast majority of that year was before the one big beautiful bill act came into play.

Chris Picciurro, CPA:

So the majority of that year, taxpayers were thinking that the Tax Cuts and Jobs Act was gonna fie phase out and that taxes were gonna go up. So a lot of people might have rearranged their tax situation and and and then in anticipation of the tax hike, and it really didn't go up.

John Tripolsky:

So. And really with that one, Chris, here's here's a a broad statement, right? I'm not going to say like, hey, we've changed. We've impacted this number drastically, you know, but maybe a little tiny bit, couple cents or so. But really, I mean, would you almost make the assumption too that now maybe more than ever that people may be more, I hate to say it, but, like, interested in tax taxes as a whole and that they can do stuff, strategy planning, all the all these things versus years past?

Chris Picciurro, CPA:

I think that a lot of I mean, the the I were hoping, right, we're building this whole media platform to help people educate themselves, and there's definitely an interest in understanding that you can control your tax situation. I think that there's more flexibility. Like, we have more gig economists. We have more solopreneurs now. The path isn't as you know, I mean, we're a little jaded in a way because we grew up in the Detroit area where the path was, okay.

Chris Picciurro, CPA:

Well, I'm gonna try to get a job at the big three, and I'm gonna lock in for thirty plus years or I'm gonna be, you know, get into a trade union, and I'm just gonna plug and play for thirty years into this more gig economy out there now. So we've got two more to wrap things up. This is really interesting also. Individual in individual income tax collections was overall higher. So even though we're in a lower marginal tax rate, individual state and trust income tax collections went from $2,730,000,000,000 to over 3,000,000,000,000.

Chris Picciurro, CPA:

That's a almost a $250,000,000,000 increase. That's crazy.

John Tripolsky:

A lot. That's a lot, man.

Chris Picciurro, CPA:

So more money is getting paid by individuals, less by businesses. Like I said, it might be from the flow through. But again, this might have been like, when we were advising our clients in doing tax planning, we didn't know when the one big beautiful bill was gonna exist. We didn't have we had to assume the Tax Cuts and Jobs Act was gonna go bye bye, and we were gonna get hit with much higher taxes in the next four to five years. So a lot of people were a lot like I said, accelerating income into a into a lower tax year.

Chris Picciurro, CPA:

So the someone's overall marginal tax rate still might be smaller, but they just paid, you know, more tax. So definitely more collections coming from individuals than businesses in in in we're looking forward to giant giant diving in next episode to see where where's the IRS enforcement going. Right? Last one, number seven. This is pretty crazy, and I don't think this is gonna be a big surprise to anyone.

Chris Picciurro, CPA:

Excise tax collections jumped significantly. So $78,000,000,000 of excise tax was collected in fiscal year twenty four. That went up to 91,000,000,000. That's a 16% increase in one year. And, you know, excise taxes don't get as much attention as individual income tax.

Chris Picciurro, CPA:

They're one of those hidden taxes. But this was the biggest percentage increase for the IRS in every tax out there. And the question brought

John Tripolsky:

that up to hidden ones. Right? Because there's a lot of them, but you're right. They're the ones that I I use the word just assumed. Right?

John Tripolsky:

Like, people just assume that. Like, oh, yep. It's just part of everyday life, which it is. You can control it a little bit, but it is.

Chris Picciurro, CPA:

Well, so to wrap it up, that's seven observations. People might be saying, well, what is an you guys just talk about excise tax as a hidden tax. I'm gonna leave you with the seven most common excise taxes as we and they are gasoline and diesel fuel tax. John, you're happy to be not paying that diesel fuel tax anymore. That's when you go to the gas station and you see why is diesel so much more than unleaded?

Chris Picciurro, CPA:

Boom. Airline ticket taxes. Taxes. Right? Just like now with airlines, oh, my flight's gonna be $200 Well, wait.

Chris Picciurro, CPA:

It's $275 now. If someone's gotta pay for these airports. Alcohol taxes, tobacco taxes. Luckily, we don't fall into that one, right?

John Tripolsky:

Right.

Chris Picciurro, CPA:

Heavy truck and vehicle, highway vehicle taxes. So, that's gonna be for those those long haul truckers. John, I don't see you with this one. Indoor tanning services. Now, I've got a nice little tan going right now.

Chris Picciurro, CPA:

It's funny when I look at the podcast. I could tell what season of the year it is because am I out playing more pickleball or not? But so I don't need to go to the indoor tanning service here in in Nashville. And then wagering taxes. We know that there's a lot more legalization of sports gambling, but there is an excise tax on that.

Chris Picciurro, CPA:

So those are the seven most common excise taxes, and and while a lotta digest, we'd love to hear your feedback about this data book. John's gonna put a link to the data book in the podcast episode as well.

John Tripolsky:

Absolutely. And, Chris, you know, to close this one out a little bit differently, I don't think I've ever wrapped up a a topic we've touched on when I think like, wow. I must be a pretty boring individual. But although it's a good thing, I don't get hit with any of those excise taxes. Don't smoke.

John Tripolsky:

Don't drink much. Don't go tanning inside. Don't dry don't don't fill up with the pumps anymore. Don't do any of those things. So I feel more accomplished than usual.

Chris Picciurro, CPA:

So that's tax efficient.

John Tripolsky:

Yeah. Man, tax tax planning. Right? Very, very ahead of that. And I mean, these numbers to me, right, looking at them, this was my first time really peeking at them, Chris, as you run through them.

John Tripolsky:

You know, we're both looking at these things as we're jumping through them. It is very significant. Like, again, those numbers might seem small in in, you know, hindsight if you're looking back, but I remember the average. Those average numbers are huge. There's a lot of growth there.

John Tripolsky:

And Chris, like you mentioned, I think next episode, you know, we're gonna dive into the compliance and enforcement side, which that's kinda where I geek out a little bit more. So I'd love to see that. And again, everybody check that one out. Again, if you're watching this, listening to wherever you are, comment on it, let us know what you think about these. And heck, I mean, you guys wanna banter back and forth a little bit too about, you know, how many, you know, excise taxes you can avoid, maybe it's a little challenge and we'll come back with them.

John Tripolsky:

So check it out, Subscribe to the show. We'll see everybody back here again next week in the Teaching Tax Flow podcast. Have a

Disclosure:

great week, everybody. The information in this podcast is educational and general in nature. It reflects the opinions of teaching tax flow and does not take into consideration the viewer's personal circumstances. It is not intended to be a substitute for individualized financial, legal, or tax advice. Consult the appropriate qualified professional prior to making any decisions.

Disclosure:

Securities are offered and supervised through Cabin Securities Inc member, FINRA SIPC. Investment advisory services are offered and supervised through Cabin Advisors LLC, an SEC registered investment advisor. Chris Picciurro is a registered representative of Cabin Securities and an investment advisor representative with Cabin Advisors LLC, teaching Tax Flow as an independent entity and is not affiliated with Cabin Securities or Cabin Advisors.