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I.R.S. Recognizes Higher Audit Scrutiny For Black Americans

May 18, 2023 | By Kali Girl

According to the Internal Revenue Service (IRS), there is a significant disparity in the auditing rates between Black taxpayers and others, reports the New York Times. As a result, the IRS is considering making changes to its case selection process to address this discriminatory enforcement of the tax code.

This acknowledgment follows the release of research this year, which revealed that Black taxpayers are disproportionately targeted for audits. Consequently, members of Congress have called for a thorough examination of the methodologies and algorithms used to determine audit selections.

In a letter to Senator Ron Wyden of Oregon, I.R.S. Commissioner Daniel Werfel wrote, “While there is a need for further research, our initial findings support the conclusion that Black taxpayers may be audited at higher rates than would be expected given their share of the population.”

According to the research, Black were found to be three to five times more likely to face audits by the IRS. The study also highlighted that the IRS disproportionately targeted tax returns that potentially contained errors related to specific credits, such as the earned-income tax credit. This credit is designed to supplement the incomes of low-income workers and help combat poverty.

It’s important to note that the IRS doesn’t gather information on race during the tax-filing process. When asked about the possibility of changing this approach, Mr. Werfel, an IRS representative, did not provide a definitive response.

Democratic Senator Elizabeth Warren of Massachusetts has advocated for the Internal Revenue Service (IRS) to gather racial data in a manner that safeguards against racial bias. Senator Wyden, criticized this situation as “shameful” and called on Mr. Werfel to rectify the issue in the upcoming filing system.

“You cannot have equality in society if algorithms and other automated systems that affect people’s lives treat them differently based on the color of their skin,” Mr. Wyden said.

“The I.R.S. is committed to enforcing tax laws in a manner that is fair and impartial,” Mr. Werfel said. “When evidence of unfair treatment is presented, we must take immediate actions to address it.”

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