IRS confirms higher audit rates for Black taxpayers.
The Internal Revenue Service (IRS) audits Black taxpayers at significantly higher rates than other Americans, according to Commissioner Daniel Werfel. The agency will review audit algorithms for certain anti-poverty tax credits to search for systemic racial bias. Researchers found that the algorithms are more likely to identify Black taxpayers for audits, despite no evidence that Black taxpayers perpetrate fraud at a higher rate than any other demographic. The IRS will devote “significant resources” to determine the scope of the problem. The algorithmic shortcomings may have been a result of more than a decade of IRS budget cuts.