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Fact Check: Do Black Americans Get Audited By The IRS More Than Wealthy Whites?

Fact Check: Do Black Americans Get Audited By The IRS More Than Wealthy Whites?

Audited By The IRS
Fact Check: Do Black Americans Get Audited By The IRS More Than Wealthy Whites? Image: Flickr

Nobody wants to get audited by the IRS. It’s a red flag that something seems amiss with one’s taxes and, in many cases, it’s a tedious process. So how does the Internal Revenue Service determine who it will audit? According to media reports based on data from the IRS, Black Americans are more likely to get audited by the IRS than other groups.

Last year, news broke across various outlets that Black, poor Americans were more likely to get audited than their wealthy white counterparts. For example, Humphreys County, Tenn. – where residents are more than a third Black – was audited at a higher rate than any other county in the nation in 2019, according to Amsterdam News.

The median income in Humphrey is $26,000 annually. The audit rate there outpaces that of Loudoun County, Virginia – where the median income is the highest in the country at $130,000 annually – by 51 percent.

It is the same for predominate Black and white counties in Georgia. Baker County Georgia is nearly half Black with a median annual income of $43,867 according to Bloomberg. Washington and Sherburne counties in Wisconsin and Minnesota, respectively, are both 95 percent white. They have incomes of $73,021 and $83,895, respectively. Baker is audited at a much higher rate than Washington and Sherburne.

There are many other examples that speak to the trend of Black, poor communities being targeted at much higher rates for audits than affluent white ones.

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Even members of the U.S. Congress were alarmed at the discrepancy. The New Orleans Tribune reported Alabama Sen. Doug Jones sent a letter to the IRS asking it to explain its disproportionate targeting of minorities for tax audits.

“To concentrate so exclusively on this subset of taxpayers defies explanation,” Jones wrote in the April 4 letter to the IRS. “For example, in Greene County, Alabama (population, 8,330), with a median household income of less than $21,000, it appears that taxpayers are audited over 40 percent more often than the national average, including areas that are much more urban and wealthy.”

He added, “For comparison, Bergen County, New Jersey, with a median population of nearly 1 million residents, and a median household income of over $90,000, has an audit rate that matches the national average,” Jones said.

Jones was not the only lawmaker to question the IRS about the matter. In response, Internal Revenue Commissioner Charles Rettig responded with a report stating the agency did not have the resources to audit wealthier taxpayers at the rate they did poor ones due to continued budget cuts. He said they used the staff they did have to focus on the Earned Income Tax Credit (EITC).

“The IRS cannot simply shift examination resources from single issue correspondence audits to more complex higher income audits because of employee experience and skillset,” the report said. “Congress must fund and the IRS must hire and train appropriate numbers of [auditors] to have appropriately balanced coverage across all income levels.”

Poor Americans – which are more often than not Black Americans – are more likely to claim the EITC. The credit is supposed to help Americans out of poverty. However, an op-ed published on Alabama.com said the numbers shed light on how institutional racism works.

“ … this story doesn’t stop at poverty. It’s still about race. It’s about institutional racism and systemic injustice,” the op-ed by Kyle Whitmore said. “You can argue all you want that the IRS doesn’t intend to target African-Americans and other minorities. But you can’t argue the fact that they’re still getting hit. Elsewhere in the country, audits followed a similar pattern, landing on immigrants and Native American reservations.”