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The IRS says blacks more likely to face audit, says it will do more to erase disparities

Posted on 5/16/23 at 1:33 pm
Posted by tiggerthetooth
Big Momma's House
Member since Oct 2010
61214 posts
Posted on 5/16/23 at 1:33 pm
LINK


quote:

The IRS on Monday said that Black taxpayers are significantly more likely to face an IRS audit, confirming recent findings. IRS Commissioner Daniel Werfel said the agency is weighing changes to address the disparity.

A study released in January by economists at Stanford University, the University of Michigan, the U.S. Department of the Treasury and the University of Chicago found the IRS audits Black taxpayers about three to five times more than other Americans. Researchers based their assessment on microdata from roughly 148 million tax returns and 780,000 audits.






quote:

“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,” Werfel wrote in a May 15 letter to the Senate Finance Committee.
Posted by LCA131
Home of the Fake Sig lines
Member since Feb 2008
72597 posts
Posted on 5/16/23 at 1:33 pm to
Cause they get too much back?
Posted by BayouNation
Member since Sep 2008
2009 posts
Posted on 5/16/23 at 1:34 pm to
Care to guess which section of the population is less likely to file their taxes three to five times less?
Posted by K9
wayx....BOBO IN '19
Member since Sep 2012
24022 posts
Posted on 5/16/23 at 1:34 pm to
They do a lot of shite at higher rates than you would expect. Murder, steal, rape, etc.
Posted by Hoops
LA
Member since Jan 2013
6525 posts
Posted on 5/16/23 at 1:34 pm to
Is it more likely linked to race or low credit?
Posted by 14&Counting
Eugene, OR
Member since Jul 2012
37618 posts
Posted on 5/16/23 at 1:34 pm to
Now do audit rates on conservatives
Posted by doubleb
Baton Rouge
Member since Aug 2006
36017 posts
Posted on 5/16/23 at 1:39 pm to
The IRS should not know if the taxpayer is black, white, Oriental or whatever.
This post was edited on 5/16/23 at 2:27 pm
Posted by Cheese Grits
Wherever I lay my hat is my home
Member since Apr 2012
54662 posts
Posted on 5/16/23 at 1:43 pm to
That explains a lot.

Posted by HoustonGumbeauxGuy
Member since Jul 2011
29504 posts
Posted on 5/16/23 at 1:46 pm to
Driving a $75,000 hellcat with no taxable income might be a red flag

Posted by Shexter
Prairieville
Member since Feb 2014
13881 posts
Posted on 5/16/23 at 1:48 pm to
quote:

The IRS doesn't track the race of filers, but the study from earlier this year claimed the higher audit rate for Black taxpayers is due to a flawed artificial intelligence algorithm relied on by the IRS to decide who gets audited.
Posted by teke184
Zachary, LA
Member since Jan 2007
95336 posts
Posted on 5/16/23 at 1:48 pm to
Why, exactly, are they more likely to get one?

Because they are running fricking scams like having both parents claim head of household and different kids to raise their standard deductions?
Posted by Lawyered
The Sip
Member since Oct 2016
29283 posts
Posted on 5/16/23 at 1:49 pm to
Cue the “we must do better.. we will do better “
Posted by Weekend Warrior79
Member since Aug 2014
16370 posts
Posted on 5/16/23 at 1:51 pm to
quote:

Specifically, he vowed to examine algorithms for audits of filers claiming the earned income tax credit, or EITC, a tax break to low- to moderate-income workers. The EITC is more closely scrutinized because it’s refundable, meaning it still provides a refund even when the credit value exceeds taxes owed. Werfel stressed the IRS does not and will not consider race as part of the audit selection process, but the original research suggests the EITC has contributed to the disparity.

So, they know what is causing the disparity in audits, but want to change it just because of a potential racial bias when the reality is it's because of an issue with people that claim the EITC.

Do these audits often find issues with returns that include the EITC?
Posted by dgnx6
Baton Rouge
Member since Feb 2006
68593 posts
Posted on 5/16/23 at 1:52 pm to
First Off, there is no way for them to know the person was black.

Second, its because blacks are more likely to receive a credit without paying in.

Which is why reparations is a dumb to begin with because the wealth transfer has already been happening.

Posted by chryso
Baton Rouge
Member since Jul 2008
11862 posts
Posted on 5/16/23 at 1:53 pm to
Why does the IRS know anyone's race?
Posted by udtiger
Over your left shoulder
Member since Nov 2006
98730 posts
Posted on 5/16/23 at 1:55 pm to
because a large percentage of them end up with a negative tax liability through refundable tax credits. the fact that net out a negative number is going to trigger scrutiny
Posted by R11
Member since Aug 2017
3390 posts
Posted on 5/16/23 at 1:56 pm to
Hmmm
You’d think by simply removing race o the paperwork would solve this problem
Posted by Jones
Member since Oct 2005
90500 posts
Posted on 5/16/23 at 1:56 pm to
c on z is scanning reddit and DU for an appropriate response that doesnt say anything
Posted by AwgustaDawg
CSRA
Member since Jan 2023
6978 posts
Posted on 5/16/23 at 1:56 pm to
quote:

The IRS should not know if the taxpayer is black, white, Orientsl or whatever.


Most likely do not know until audited but address is indicative of race in most areas. Not 100% accurate of course but a pretty consistent indicator.

A big part of the issue could stem from the high number of black tax payers who use tax preparers in the neighborhood who aren't really tax professionals. I have known a bunch of black folks who prepare tax returns with no training or anything...most tax returns are fairly simple for individuals but some are not and need to be done by a competent professional. The number of people preparing tax returns in black communities without any training or certification stems from black folks rightfully mistrusting white tax preparers...also stems from the idea of keeping the money in the community, to a lesser extent. That is understandable and laudable but it is not without risk, especially if the return is complicated. Most are not, especially with recent tax changes which eliminated the ability to itemize for most individuals...anyone can do that return without fear of audit because there is nothing to audit, the numbers are what they are and the preparation merely consists of putting them in the right spot on the form.
Posted by AwgustaDawg
CSRA
Member since Jan 2023
6978 posts
Posted on 5/16/23 at 1:57 pm to
quote:

Driving a $75,000 hellcat with no taxable income might be a red flag


Unless it is claimed as a business expense how would the IRS know what you were driving?
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