A new study found Black taxpayers are at least three times more likely to be audited by the IRS, even when accounting for “the differences in the types of returns each group is most likely to file,” per the New York Times.
The findings highlight discrimination in the computer system used by the agency to select who’s audited, according to a group of economists from Stanford University, the University of Michigan, the University of Chicago, and the Treasury Department who authored the study.
Some of the discrimination appears to stem from decisions made by IRS officials over the last decade as they increasingly relied on automated systems to select tax returns for audit.
Those decisions have led to the system disproportionately flagging tax returns with potential errors in claiming tax credits such as the earned income tax credit, which helps workers with low incomes.
This results in audit rates that are three to fives times higher for Black Americans than their counterparts, “even when comparing that group to other taxpayers who also claim the E.I.T.C,” the New York Times reports.
According to the economists of the study, the findings don’t suggest bias from individual tax enforcement agents as they don’t know the race of the people they are auditing. They also didn’t find any evidence or reason for the I.R.S. to specifically target Black Americans at a disproportionately higher rate.
However, researchers say Black taxpayers are more often flagged by the computer system as they appear to file returns with potential errors that are easier for the automation to identify than their counterparts. For example, Black Americans are less likely to include business income in their returns, which is harder for the agency to audit because the process requires “expertise from individual auditors,” per the Times.
To decrease discrimination, researchers suggest that the IRS program its system to target audits toward more complicated returns with higher potential dollar value.
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