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Tax season is underway, and it’s been something of a season of crisis for the Internal Revenue Service (IRS). The agency has admitted that it is understaffed and underfunded, with the National Taxpayer Advocate having laid that out in a report to Congress last year. There was also the recent debacle of ID.me, the controversial vendor that the IRS contracted to facilitate “video selfies” for verification until an outcry led to its cancellation.
Now, there’s another new report that doesn’t paint the IRS in a particularly sympathetic light. The report, from Syracuse University’s Trac IRS, found that the IRS is more likely to audit poorer families than the rest of the population.
“A large increase in federal income tax audits targeting the poorest wage earners allowed the Internal Revenue Service to keep overall audit numbers from further declines for Americans as a whole during FY 2021,” the report said. “That resulted in these low-income wage earners with less than $25,000 in total gross receipts being audited at a rate five times higher than for everyone else.”
Per the report, the lowest-income wage earnings are audited at a rate of thirteen per 1,000 returns filed, while “everyone else” is audited at a rate of 2.6 per 1,000. Overall, the agency audited four returns out of every 1,000, although audit rates have been dropping for many years.
The Transactional Records Access Clearinghouse found the records in internal IRS reports that were obtained through a Freedom of Information Act request.
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