IRS is Testing Changes to Audit Algorithm After Study From Jacob Goldin and Colleagues Finds That Black Americans Face More Audit Scrutiny
IRS weighing ‘audit selection algorithm’ changes for low-income taxpayer credit
After vowing in September to “substantially” reduce audits on a low-income tax credit, the IRS confirmed it’s taking steps to address the inequity.
“We’ve announced a significant and dramatic reduction in the number of earned income tax credit audits planned for this coming tax year,” IRS Commissioner Danny Werfel said during a House Ways and Means Committee hearing Thursday.
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Black Americans are roughly three to five times more likely to face an IRS audit than other taxpayers, according to a study released by economists from Stanford University, the University of Michigan, the U.S. Department of the Treasury and the University of Chicago in January 2023.
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