(ReclaimingAmerica.net) – The Internal Revenue Service has been accused of racism after a new academic study found that black Americans are much more likely to be subjected to tax audits than other ethnic groups.
According to the study released on Tuesday by Stanford’s Institute for Economic Policy Research, the chance that a tax return filed by a black household would be audited is between 2.9 and 4.7 times higher than those of non-black families.
The study authors said the main reason for that was the IRS’s automated systems because they assign audits to tax returns claiming the Earned Income Tax Credit, a program benefiting the working poor.
Even among the EITC recipients, however, black taxpayers are audited at a higher rate, The Washington Times reported, noting that the IRS algorithms are designed to choose returns that are more likely to need correction.
Thus, the researchers from Stanford, the University of Chicago, the University of Michigan, and the Treasury Department found that black taxpayers accounted for 43% of audits and 21% of EITC claims.
In 2014, the year under study, black people made up about 12% of the population of the United States.
“Racial disparities in income are well known, and what the IRS chooses to focus on has big implications for whether audits complement, or undercut, a progressive tax system,” wrote Daniel Ho, one of the researchers, in an article published by Stanford University.
The report points out that the IRS is one of the few US government agencies which does not consider race or ethnicity.
This has complicated attempts to study tax issues based on race, but the researchers involved in the study “inferred taxpayers’ race using names and locations.”
They compared their “racial probability calculations” for the taxpayers in North Carolina with the state’s voter registration database. They found a correlation, which “gave them confidence” that their method was correct.
The researchers completed their calculations by matching their race data with 2014 audit rates.
The study authors said they found a significant disparity between the audits of black and non-black tax return filers at all income levels, especially those with an annual income of under $35,000.
They claimed that was caused by the IRS measures determining which tax returns were most likely to be misreported.
For instance, the study found there was a 1-in-11 chance that a single EITC-claiming black male with dependents would be audited, while a non-black filer in the same category would face a 1-in-33 audit chance.
Democrat US lawmakers declared the report’s findings evidence of “racial biases’ in the US government.
“This is unacceptable,” stated Rep. Richard Neal of Massachusetts, the top Democrat on the House Ways and Means Committee.
IRS subjects Black taxpayers to more audits, study findshttps://t.co/E96Zq9WmXA pic.twitter.com/KhtXOdsHgl
— The Washington Times (@WashTimes) January 31, 2023
