The Internal Revenue System is about three times more likely to audit Black taxpayers compared to other taxpayers, a new study on the IRS found.

“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,” the study, published by Stanford’s Institute for Economic Policy Research, reads.

How was the study conducted?

The study, which The New York Times called “one of the most detailed studies yet on race and the nation’s tax system,” was conducted by economists from Stanford University, the University of Michigan, the University of Chicago and the Treasury Department.

Because the IRS does not track the race of taxpayers, the researchers combined census data — which does track race — with the data from tax returns and audits ranging from 2014 to 2018 provided by the Treasury.

Using that data, researchers found an “immediate correlation between the racial composition of neighborhoods and the audit rates in those areas,” per the Times.

Why are Black taxpayers more likely to be audited?

Daniel E. Ho, an author of the study, says the systemic discrimination likely is not intentional but instead comes from internal IRS algorithms, according to Stanford Human-Centered Artificial Intelligence.

View Comments

“The main source of the disparity is differing audit rates by race among taxpayers claiming the earned income tax credit,” the study reads.

While Black taxpayers made up 21% of earned income tax credit claims, 43% of earned income tax credit audits were conducted on Black taxpayers.

How did the Treasury Department respond to the study?

In response to the findings of the study, a Treasury spokesperson said that “equitable enforcement of our tax laws is a top priority for the administration,” according to The Hill.

The spokesperson continued, “Resources provided by the Inflation Reduction Act will enable the IRS to upgrade technology and hire top talent to go after wealthy tax evaders.”

Join the Conversation
Looking for comments?
Find comments in their new home! Click the buttons at the top or within the article to view them — or use the button below for quick access.