The Internal Revenue Service said Monday that black taxpayers are far more likely to be investigated than other taxpayers and is considering changes to its case selection process to address discrimination in how tax laws are enforced. .
The approval comes after a study earlier this year showed black taxpayers were unfairly audited, overhauling methodologies and algorithms that help determine who is elected from Congress. There were voices calling for The Internal Revenue Service, which received an $80 billion infusion last year as part of its anti-inflation bill, said it would work to make the system fairer.
“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 percentage of the population. Yes,” IRS Director Daniel Werfel said in a letter to senators. Senate Finance Committee Chairman Ron Wyden of Oregon.
Werfel said the IRS has committed “significant resources” to identifying the reasons for the imbalance and evaluating the data available to the agency in determining what to audit and how to automate that process. He said the IRS could consider basing its audits on “broader tax issues,” rather than focusing on people who may be improperly claiming earned income tax credits. suggested.
The study found that black taxpayers are three to five times more likely to be audited than non-black taxpayers. The report unfairly warned that the IRS could be erroneous in claiming certain deductions, such as the earned income tax credit, which supplements the income of low-income workers to alleviate poverty. pointed out.
The IRS doesn’t collect information about race as part of the tax process, and Werfel didn’t say whether he thinks that should change.
Massachusetts Democratic Senator Elizabeth Warren said last month that the IRS should collect racial data in a way that prevents racial bias.
Wyden said on Monday that it was “shameful” that racial bias in the algorithms used by the IRS guided the auditor selection process. He urged Werfel to fix it in the next filing system.
“We can’t achieve equality in society if algorithms and other automated systems that influence people’s lives treat people differently based on the color of their skin,” Wyden said.
Werfel says part of the $80 billion spent on modernizing the IRS will help improve support for underserved communities and help taxpayers claim available deductions. He said he would use it for He added that the agency will also work to reduce disparities in tax enforcement based on gender, geography and ethnicity.
“The IRS is committed to enforcing tax laws in a fair and equitable manner,” Werfel said. “When evidence of ill-treatment is presented, we must act immediately to address it.”
