Biden's IRS May Be About to Order More Audits of White and Asian Taxpayers Because of Equity

(IRS)

The conservative watchdog group America First Legal Foundation has filed a massive Freedom of Information Act (FOIA) request to determine if the IRS is about to order more audits of White and Asian taxpayers to achieve “equity” with the number of audits ordered on Black taxpayers.

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In case you’re late to the game, equity is the Critical Race Theory buzzword that describes the insane proposition that any difference in outcomes between racial or ethnic groups is because of injustices baked into the system. Of course, to buy this, you have to agree that people with agency don’t exist, and that we are all part of racial or ethnic groups and bound to those groups in all endeavors.

On February 16, 2023, Joe Biden signed Executive Order 14091, titled Further Advancing Racial Equity and Support for Underserved Communities Through the Federal Government; see Joe Biden Picks Obama Enforcer Susan Rice to Implement Critical Race Theory Throughout the Federal Bureaucracy for more on this Executive Order. That order requires

“…each agency head shall support ongoing implementation of a comprehensive equity strategy that uses the agency’s policy, budgetary, programmatic, service-delivery procurement, data-collection process grantmaking , public engagement , research and evaluation and regulation functions to enable the agency’s mission and service delivery to yield equitable outcomes for all Americans, including underserved communities.”

In January 2023, the Stanford University Institute for Economic Policy Research issued a “working paper” titled Measuring and Mitigating Racial Disparities in Tax Audits.

Measuring and Mitigating Racial Disparities in Tax Audits by streiff on Scribd

The authors, including three IRS officials, conclude that Blacks are likelier to be audited than other racial groups.

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Black taxpayers claiming the EITC are between 2.9 and 4.4 times as likely to be audited as non-Black EITC claimants. In contrast, we observe a much smaller, though still statistically significant, difference in audit rates between Black and non-Black taxpayers who do not claim the EITC.

Because EITC audit selection is largely automated, and because the IRS does not observe race, the status quo racial audit disparity is unlikely to be driven by disparate treatment of Black and non-Black taxpayers. Nonetheless, there may be opportunities for the agency to adjust its enforcement policies in ways that alleviate the disparity without significantly undermining other policy goals.

This is how the Stanford press release framed the findings:

Before Biden signed the Racial Justice Executive Order that engendered this research project, the IRS had neither the impetus nor the ability to do that. Now that they know the equity implications of how they select audits, Ho hopes they will tweak their confidential audit selection algorithm.

“Racial disparities in income are well known, and what the IRS chooses to focus on has big implications for whether audits complement, or undercut, a progressive tax system,” Ho says.

Consider this for a moment. The IRS doesn’t know the race of taxpayers; Black taxpayers have a higher frequency of audits than other races and ethnicities; the audit selection is automated and can’t be influenced by race, so we must fix it so that the system can guess your race and distribute audits accordingly.

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This gained additional significance on February 15 at the confirmation hearing for Biden’s nomination for IRS commissioner, Daniel Werfel. During his hearing, Werfel referenced this study. While he did not promise to use it, in the context of Biden’s push for “equity,” the mention of the study seemed a clear foreshadowing of things to come.

Stephen Miller’s America First Legal Foundation has decided to get to the bottom of it.

Today, America First Legal’s (AFL) Center for Legal Equality launched an investigation of the Biden Administration’s illegal plans for the Internal Revenue Service (IRS) to make race-based tax audit and enforcement decisions.

Congress has prohibited the IRS from collecting race and ethnicity data from American taxpayers. But since President Biden took office, the Treasury Department has been using “racial equity” as a “key factor in the design of tax compliance,” and illegally “examining the tax system through a racial equity lens.” Statements by Deputy Secretary of the Treasury Wally Adeyemo, Assistant Secretary for Tax Policy Lily Batchelder, and members of the “Treasury Advisory Committee on Racial Equity [sic]” demonstrate that the Treasury Department is committed to imputing race and ethnicity into tax data for the purpose of ensuring that more white, Asian, and mixed-race Americans are audited based solely on their race or national origin.

The FOIA request is pretty blunt and extensive:

‘Statements by Deputy Secretary of Treasury Wally Adeyemo, Assistant Secretary for Tax Policy Lily Batchelder and members of the Treasury Advisory Committee on Racial Equity demonstrate that the Treasury Department is committed to imputing race and ethnicity into tax data for the purpose of ensuing that more white, Asian and mixed-race Americans are audited based solely on their race or national origin.’

Stephen Miller, the group’s president who previously served as a senior advisor under Trump, vowed that America First will file other legal documents challenging the executive order

‘Consequently, there is very strong reason to believe that the Treasury Department is altering the IRS audit algorithms to illegally operationalize racial quotas and/or requiring agents to use imputed race and ethnicity data to ensure “racial equity.'”

As part of its FOIA request, the America First Legal Foundation is seeking all records and communication from specific individuals at the Treasury Department and the IRS ‘referring to “discrimination,” “discriminatory,” “race,” “racial,” “ethnicity,” “color,” “BIPOC,” “Asian,” “Indigenous,” “Black,” “Brown” or “white.”‘

It is also asking for documents mentioning ‘”audit,” “enforcement,” “NRP,” “RAAS,” “algorithmic,” “selection,” “sampling,” or “strata.”‘

America First is specifically asking for records of communication from January 20, 2021 through the time the FOIA request is processed, including communications from Treasury Secretary Janet Yellen.

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At this point, what the IRS is up to is speculative. But there is no reason that agency deserves any benefit of the doubt.

The IRS has been used as political stormtroopers in the past. Under Obama, the IRS targeted conservative nonprofits for increased scrutiny in open violation of federal law. Lois Lerner, who did real damage to our society, was never charged with any crime. Lucky for her, she didn’t jaywalk at the US Capitol. In June 2021, the leftist website ProPublica published tax returns of some of the wealthiest people in America after receiving several thousand tax returns from someone in the IRS. The IRS has shown no interest in either finding the culprits or answering questions about the leak.

Given Biden’s devotion to racial balkanization, it is impossible to believe that his minions will not use the Stanford study to erase disparities. They are hiring 87,000 new IRS staffers. They’ve got to do something.

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