laughing dog
Contributor
A study published Monday shows that IRS algorithms target blacks for auditing at much higher frequencies even after controlling for other variables. Remember that race is not part of the IRS tax forms.
Note also that these audits are more likely to be middle and low income earners (especially EITC eligible filers).
I don't think this result is something that should be shrugged off as "whaddya going to do" because algorithms are based on decisions made by people.
(source : Blacks much more likely to be audited by the IRS )The paper, published by Stanford’s Institute for Economic Policy Research, said that despite the IRS’s “race-blind audit selection,” Black taxpayers are audited 2.9 to 4.7 times more often than non-Black taxpayers. However, the research did not suggest that the disparity is a result of one group of people evading taxes more than another but rather that it may be a result of the computer algorithms the IRS uses for selection.
“Using counterfactual audit selection models, we find that maximizing the detection of underreported taxes would not lead to Black taxpayers being audited at higher rates,” the paper reads.
The study found that the largest disparity between the groups was among those claiming the earned income tax credit (EITC), which helps low- to moderate-income workers and families get a tax break, according to the IRS.
“Even when such algorithms are formally neutral with respect to protected characteristics like race, there is widespread concern that they can disproportionately burden vulnerable groups,” the economists wrote.
Note also that these audits are more likely to be middle and low income earners (especially EITC eligible filers).
I don't think this result is something that should be shrugged off as "whaddya going to do" because algorithms are based on decisions made by people.