According to Stanford RegLab, Black taxpayers receive IRS audit notices at least 2.9 times more frequently than non-Black taxpayers and possibly as much as 4.7 times more often.
The new study included research by Daniel E. Ho, the William Benjamin Scott and Luna M. Scott Professor of Law at Stanford Law School, faculty director of the Stanford RegLab and a senior fellow at the Stanford Institute for Economic Policy Research, and economists in the U.S. Department of Treasury’s Office of Tax Analysis.
The researchers concluded that the disparity “is unlikely to be intentional on the part of IRS staff.”
The team’s research showed that a set of internal IRS algorithms causes racial differences in audit selection. Goldin compared them to the recipe for Coca-Cola: “It’s completely secret.”
To better understand this audit selection bias, the research team focused on the racial impact that various audit selection policies might have. The result showed how the IRS could change its secret algorithm to make it less unfair to people of different races. Read more
