National
IRS chief acknowledges Black taxpayers face higher probability of being audited
Washington (CNN) — Internal Revenue Service Commissioner Daniel Werfel acknowledged in a letter to the US Senate on Monday that Black taxpayers are audited at significantly higher rates than non-Black taxpayers, a revelation he said has left the agency “deeply concerned.”
“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 said.
The IRS was urged by lawmakers to look into the racial disparities after a January report by a Stanford research team initially revealed the findings. The research, a unique partnership with Department of Treasury, found that Black taxpayers are audited 2.9 to 4.7 times the rate of non-Black taxpayers – a difference that is highly influenced by Earned Income Tax Credit recipients. However, the study pointed out that there was a smaller but still significant inequity in audit rates between Black and non-Black taxpayers who do not claim the EITC.
“The research further suggests that most of this disparity is driven by differences in correspondence audit rates among taxpayers claiming the Earned Income Tax Credit,” Werfel acknowledged. The EITC, a refundable credit, has been a way to financially help low- and moderate-income workers (defined in 2022 as those with earned income under $59,187), and especially filers with children.
While the IRS does not collect information about race from taxpayers, the report shows that the agency disproportionately flags tax returns that claim the EITC for potential errors.
Daniel E. Ho, who led the research team at Stanford, told CNN that his group does not have access to how the IRS conducts audit selection but that the research pointed to the EITC and a “focus on lower dollar, higher certainty claims as opposed to lower certainty, higher dollar value claims” as factors for the disparities.
Werfel, who was confirmed by the Senate in March, said the agency is looking into how changing methods for case selection would impact the disparities and that the EITC selection evaluation is a top priority. However, he stated that “research is ongoing and additional time is needed to yield a robust understanding of the drivers of this disparity and to thoroughly evaluate the right potential programmatic changes to address it.”
In light of the news, Democrats on the Ways and Means Committee have promised that they “will not rest in our quest to build a tax system that works fairly for all Americans and we will continue our rigorous oversight of the IRS to end these disparities.”
The IRS is currently undergoing a massive overhaul, thanks to an influx of funding, totaling $80 billion over a decade, from the Inflation Reduction Act. The sweeping tax and climate law was passed by Democrats along party lines last year.
Generally, the funding is meant to support the agency in cracking down on tax cheats and providing better service to taxpayers.
Biden administration officials have repeatedly said that taxpayers earning less than $400,000 a year won’t face an increase in taxes due to the new funding, though there is some uncertainty about how exactly the IRS can ensure this.
This story has been updated with additional reaction.
The-CNN-Wire
™ & © 2023 Cable News Network, Inc., a Warner Bros. Discovery Company. All rights reserved.
By: Pristine Villarreal
May 17, 2023
Latest Instagram Posts
25 years later, the memories of 9/11 remain vivid for the firefighters who witnessed the tragedy firsthand. A longtime FDNY firefighter reflects on the trauma, loss and moments that have stayed with him a quarter-century after the attacks. #911 #September11 #NeverForget #FDNY #Firefighter #911Anniversary #25YearsLater #NewYorkCity #Remembering911 #NBCTPalmSprings
A troubling history is coming to light in a Palm Desert husband’s death. 65-year old Vicky Kim is accused in the death of her husband — but prosecutors say she had previously faced several domestic violence cases involving him. The Riverside County District Attorney’s Office says it had secured protective orders against Kim before a judge later resolved her cases as misdemeanors, released her from custody and terminated those orders. Now, Kim is expected to be arraigned in connection with her husband’s death. Court records allege the weapon used was a flagpole.
☕️🔥 How hot is TOO hot? A new study finds that drinking scalding-hot beverages may be linked to nearly 3 times the risk of esophageal cancer—the most common type of cancer affecting the esophagus. The takeaway? Let that coffee, tea or other hot drink cool down before taking a sip. ❤️ #HealthNews #EsophagealCancer #CancerRisk #HotBeverages #Coffee #Tea #CancerAwareness #HealthyHabits #HealthTips
☕️ Social Time with Thalia & Jerry. The squishy craze!
Coachella city council unanimously approved an anti-nepotism rule that ban an any Councilmember from appointing a family member or household member to the city’s commissions and committees. Tune in to our 11 p.m newscast as our @newsbyalondra breaks down the policy.
An anti-nepotism rule will be discussed and voted on at tonight’s Coachella City Council meeting - that would ban city council members from appointing their own family members or household members to commissions and committees. Tune in to our 8:30 p.m newscast and our socials and website as our @newsbyalondra brings us the latest details on that final vote.
☕️ Social Time with Thalia & Jerry. What’s your favorite NFL team?
A major cleanup is underway after powerful waves damaged 14 beachfront homes near Capistrano Beach in Orange County. Residents are concerned their homes could remain vulnerable without protective measures in place. Crews are clearing debris, while efforts to bring in protective boulders were delayed by high tide. #California #OrangeCounty #CapistranoBeach #CoastalWaves #Beachfront #WeatherNews
Two new Girl Scout cookies are coming in 2027 🍪 Meet Sparkables: a crunchy oatmeal cookie with chocolate chips and colorful sprinkles, developed with Partake in a facility designed to avoid the nine major food allergens. And for the pups: Patch Pals 🐾 Soft-baked, blueberry muffin-flavored dog cookies in four adorable designs. Both will be available online beginning in January. Which one are you most excited to try? #GirlScouts #GirlScoutCookies #NewCookies #DogTreats #FoodAllergyFriendly #CookieSeason
It’s more than just dancing — it’s fitness, confidence and community. A Coachella Valley dance studio is helping adults move their bodies, have fun and step into their power, one class at a time. And during Beyoncé’s birthday week, the energy was turned all the way up. “When in doubt, twerk it out.” See how VXN Worldwide Dance Company is getting the Valley moving — and building confidence along the way. Read more at NBCPalmSprings.com. #CoachellaValley #PalmSprings #Dance #Fitness #Community NBCPalmSprings