'Black taxpayers are audited at 2.9 to 4.7 times the rate of non-Black taxpayers,' researchers from Stanford University and the Treasury Department say.
Black taxpayers are audited by the IRS at a disproportionate rate, according to a new study that adds to the research on the uneven ways race-neutral tax provisions and enforcement play out across different communities.
“Despite race-blind audit selection, we find that Black taxpayers are audited at 2.9 to 4.7 times the rate of non-Black taxpayers,” wrote the authors, who included researchers at Stanford University and economists at the Treasury Department’s Office of Tax Analysis. The data puts the focus on the underlying algorithms and technology the IRS uses to determine who is getting audited. “Our results highlight how seemingly technocratic choices about algorithmic design can embed important policy values and trade-offs,” the authors said.
“The IRS should drill down to understand and modify its existing audit selection methods to mitigate the disparity we’ve documented,” Stanford Law School professor Daniel Ho said in a statement. “And we’ve shown they can do that without necessarily sacrificing tax revenue.” The IRS has a mid-February deadline to detail how it will use the money. The tax agency did not immediately respond to a request for comment.
The study follows another recent look at the intersection of race and taxes. In a report published last month, researchers at the Treasury Department’s Office of Tax Analysis projected which households were making the most use of different parts of the tax code.
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