The IRS has admitted to auditing Black taxpayers at a higher rate than other Americans, confirming a previous study that found Black people were up to five times more likely to have their federal tax returns audited.
On Monday (May 15), the tax agency shared its findings from an internal investigation into its auditing processes, per CBS News.
“[O]ur initial findings support the conclusion that Black taxpayers may be audited at higher rates than would be expected given their share of the population,” IRS Commissioner Daniel Werfel wrote Monday in a letter to the U.S. Senate.
Lawmakers and policy experts called for an internal investigation after a study found major racial disparities in the agency’s auditing process. The IRS doesn’t track the race of filers, but the study revealed Black taxpayers were susceptible to a higher audit rate due to a possible flawed AI algorithm that the agency uses to decide who gets audited. According to the study, those with low income were even more likely to get audited due to Earned Income Tax Credit (EITC), “a benefit aimed at low-wage workers that has a high rate of erroneous claims,” per CBS News.
Following Monday’s admission, the IRS said it plans to direct money to “understand any potential systemic bias in compliance strategies and treatments.”
“We will work to identify any disparities across dimensions including age, gender, geography, race, and ethnicity as well as continually refining our approaches to compliance and enforcement to improve fairness in tax administration and maintain accountability to taxpayers as informed by our research,” Werfel said.
Lawmakers called for change following the admission.
“Back in March my colleagues and I raised alarms to the new IRS boss about Black taxpayers being over-audited and today he confirmed our suspicions,” wrote Rep. Bill Pascrell, Jr., a Democrat from New Jersey, on Twitter. “The IRS is making strides but extra audits of Black Americans is disgraceful and must end.”
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