The IRS has said that Black taxpayers are significantly more likely to face an IRS audit, per CNBC.

5/19/2023

The IRS has said that Black taxpayers are significantly more likely to face an IRS audit, per CNBC.

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.

Werfel said the IRS has dedicated “significant resources” to address the disparity, including a closer look at the agency’s automated processes and data used for exam selection.

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.

Werfel added: “I will stay laser-focused on this to ensure that we identify and implement changes prior to next tax filing season.”

Senate Finance Committee Chair Ron Wyden, D-Ore., said the findings are a “shameful consequence” of racial discrimination that often shows up in government and private organization algorithms. “This bias is completely unacceptable regardless of where it occurs, and we have an obligation to stamp it out,” he said in a statement on Monday.